WASHINGTON - U.S. consumers may try to save money by eating less meat if they continue to feel the pinch of high gasoline prices, the chief executive of Tyson Foods said on Friday. "People want meat... but it's getting pretty expensive," CEO Donnie Smith told reporters at an agricultural conference in Washington D.C. "We're concerned that there are going to be thresholds, depending on disposable income, where that demand kind of tops out." Rising fuel prices are the latest concern for consumers, who have already been facing high prices for beef due to a drought that reduced cattle herds in the southern U.S. Plains last year. High prices for corn, used to feed livestock, helped drive up beef prices. The result is that backyard cookouts this year could be subdued. Retail prices for beef in January set a record high for the fifth straight month. Smith, speaking at the U.S. Department of Agriculture's Agricultural Outlook Forum, noted consumer spending seems to suffer when the national average price for gas is above $3.50 or $3.75 a gallon. He predicted that per capita consumption of beef will continue to weaken for the next two years because of high costs. Cattle ranchers in Texas, the epicenter of the drought, confirmed high gas prices will likely reduce demand for beef. "If we start taxing consumers with motor fuel prices again, we'll probably take the edge off our summer vacation season and certainly [that will] be damaging to retail meat demand," said Don Close, marketing director for the Texas Cattle Feeders Association. Consumers also could back away from chicken. Tyson is buying raw chicken from producers every week, instead of stocking up on supplies, because of uncertainty about the strength of demand, Smith said. He said the company will watch sales through the early part of the summer grilling season to see whether demand is disappointing. The USDA on Friday predicted domestic per capita consumption of red meat and poultry for 2012 would decline by more than 6 pounds, or about 3 percent, to just over 198 pounds retail weight. That would be the lowest level since 1987.
Tyson Foods: High gasoline prices threaten beef demand
Sponsored Links
And Americans eating less beef is a bad thing?
That in and of itself is not necessarily a bad thing. But that is the so called canary in the coal mine. It is only an early sign that American families have a big problem with our family budget. Each will have to figure out ways to save money in order to buy pay for gas prices. Most folk have never looked at their anual gas budget. Do yours. Divide your anual miles you drive, by the MPG avg of your vehicles to determine how many gallons you use. Unless you have unlimited disposable income, you will quickly see how much extra your gas costs per month, and it will be up to each family, to determine what it is we are willing to do without. Now if meat prices could go down as demand goes down, meat volume may remain high. But because meat prices are directly related to fuel prices, as is every other thing transported by truck to the grocery store, and also directly related to corn prices, which also is going up, meat is the perfect storm to rise exponentially, so will be one of the first. And is not necessarily a bad thing, unless you are a cattle or chicken farmer. If your family decides to do without a cell phone to pay for your gas price increase, then it is a bad thing for cell phone providers. If you determine to not buy your wife a new dress, it is a bad thing for the dress shop.
I'm sure now, even you can understand, yes eating less beef is a bad thing.
I quit buying any Tyson products because they were found to be using a lot of illegal workers instead of U.S. Citizens.
They made a big show of firing them and hiring Citizens, but i don't trust them. The probably still have illegals employed.
I'm retired and on a very limited income so I buy very little meat now. With higher gasoline and meat prices, I need the gasoline worse. At least i can shop and get other groceries.
- New animal identification rules aid disease traceability
- Oklahoma producers have access to new OQBN tool
- Survey reveals most Americans in favor of COOL
- Oil ends higher on weaker dollar, supplies weigh
- Purdue's beef evaluation program receives 10,000th bull
- Corn planting pace turns from record slow to record fast
- Michigan hay buyers should plan purchases early
- Ag markets were mixed to start the new week
- U.S. cattle placements rise in April as feed costs subside
- Schwieterman: Cattle futures end week with sharp losses
- The relationship between retail gasoline prices and futures prices
- Corn and soybean prices continue to retrace 2012 drought rally
Comments (3) Leave a comment