High beef prices could force consumers to choose less expensive protein options.
When you think of lobster, chances are you think of a special occasion. At $24/lb., most folks are certainly not going to eat lobster on a regular basis. Likewise, many are becoming increasingly concerned that the rising price of beef -- particularly the higher-value cuts like the ribeye and tenderloin -- is making our product too expensive for consumers. Is beef becoming the new lobster? Say it ain’t so!
This question was the headline of an article that appeared in my local newspaper last week. The article quoted Cory Eich, South Dakota Cattlemen’s Association president and cattle producer from Canova, SD, who said, “We don’t want to turn steak into lobster."
On average, beef prices are about $1/lb. higher today than in 2007, which can be attributed to fewer cattle in the U.S., a situation brought on by higher input costs and the worst drought we’ve seen in 50 years. The article stated rising fuel prices, the 2% increase in payroll taxes, and the storms on the East Coast as being possible factors in why consumer enthusiasm about beef has cooled recently.
What we’re seeing is consumers trading down, resulting in a “hamburger economy.” They are also trading out -- opting for cheaper protein sources like chicken and pork, which many view as easier to prepare.
The good news is that beef is versatile and affordable. Sure, a ribeye can cost just as much as lobster in a high-end restaurant, but choosing budget-friendly beef cuts to prepare at home can be just as tasty and satisfying as the most elegant dining experience.
To help educate consumers about the versatility of beef on a budget, the American Meat Institute (AMI) and the American Meat Science Association recently launched the latest installment of their Meat MythCrusher video series. The series seeks to bust some of the most common myths surrounding meat.
"The new video explores the facts about meat affordability in the face of recent rising meat costs. Severe drought and competition for corn from the ethanol industry have caused corn prices to hit records levels, causing meat and poultry prices to rise as well since corn is a critical part of animal feed. This is led some to conclude that meat is getting more expensive, says AMI.
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But Iowa State University Professor Steve Lonergan, PhD, says when you consider historic data, meat prices have actually decreased. “If we use 1980 as reference, we spent 31% of our grocery budget on meat,” he explains. “Today, that number is about 21%. In that same time period, pork is down about 38%, steak is down 25%, and ground beef is down 20%.
Lonergan further confronts the myth by comparing the percent of disposable income spent on food in other countries. He says the U.S. only spends roughly 6%, whereas Europe spends 10%, and other developing countries spend up to 45%. Additionally, he challenges the assumption that affordable food is causing America’s obesity problem saying, “blaming cheap food prices for the obesity problem oversimplifies a complex and difficult matter.
The Meat Mythcrusher series includes more than 20 videos, which have logged more than 28,000 views on YouTube since its 2011 launch. All of the videos and more are available at www.meatmythcrushers.com.
Beef doesn’t have to become the next lobster. As producers, high beef prices are a good problem to have, but we certainly don’t want our prices to become a factor that eliminates this protein option from the center of the dinner plate. From ground beef to sirloin steaks, there are certainly great beef options at affordable price points. Our task is to educate our consumers on those different options.
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