While beef production has dropped to its lowest level since 1952 with 90.8 million head nationally, beef production is up 2.2% to 1.1 million head in Michigan. According to the USDA WASDE Report, beef consumption in the U.S. continues to decline. Per capita consumption was 59.6 pounds in 2010 and is projected to drop to 54.8 pounds in 2012. The Midwest region of the country is the largest consumer of beef.
Eighty-seven percent of households consume beef and the usage is consistent across all income levels. Men older than 55 consume beef more frequently than others, and young women under 25 consume the least amount of beef. Ground beef is the type of beef most often consumed and is served in 39% of homes at least once a week. Families with children are the biggest users of ground beef.
Beef prices have increased from an average price per pound of $4.40 for choice retail beef in 2010 to the current price for choice retail beef of $5.09 per pound. Consumers are sensitive to the price increase and are modifying their purchasing habits. According to research by the National Cattleman’s Beef Association (NCBA), consumers are buying less beef, less expensive cuts and beef on sale and freezing it for later use. Consumers are also switching to less expensive options such as chicken or meatless meals.
In addition to price, consumers have health and nutrition concerns about saturated fat and cholesterol. Research shows that consumers are willing to pay more for extra lean beef. A study by NCBA demonstrated that 27% of shoppers are willing to pay up to $1 a pound more, 13% are willing to pay $1.50-$2.00 a pound more, 11% will pay $2.50-$3.00 a pound more and 10% will pay a premium of $3.50-$4.00 a pound. This demonstrates an opportunity for farmers in producing leaner beef.
Grass-fed beef has been identified as being lower in fat and saturated fat. These attributes are likely to be contributing to the increasing popularity of grass-fed beef. It has been identified as a growing trend by major consumer research firms like Mintel and the Hartman Group. Research by the National Restaurant Association also has identified grass-fed beef as one of the top trends in the food service industry.
Beef producers who are interested in learning more about developing beef products to meet the changing needs of consumers may contact the MSU Product Center for assistance. The Product Center can assist with developing a business plan for marketing a differentiated beef product.
Source: Brenda J. Reau, Michigan State University, MSU Product Center