Meat consumption drops as prices rise

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U.S. meat consumption is down, and beef consumption in particular has lost ground, according to the 2013 “Power of Meat” study. Price is a key reason for the decline as beef prices have climbed through a period of tight consumer budgets, but other factors also are involved.

The report, published by the American Meat Institute and the Food Marketing Institute with funding from Cryovac, illustrates the challenges and opportunities the beef industry faces in building sales and market share.

According to the survey results, consumers on average prepare 5.1 home-cooked dinners each week, with 3.6 of those including a portion of meat or poultry, down from 4.1 meals last year. Respondents on average eat 0.9 dinners out each week and order out or carry home the remaining dinner. The report does not cover the contents of the restaurant or home-delivery meals.

The number of consumers reporting they include meat in at least one dinner per week, at 93 percent, was down just one percentage point from 2012 and has held steadily at 93 or 94 percent since 2009. However, just 69 percent report including meat in dinners at least three times per week, compared with 74 percent last year, and 18 percent include a meat item six times per week compared with 23 percent in 2012.

Much of the decline occurred in beef, which is not surprising since beef has experienced larger price increases than pork or poultry in recent years. The report shows retail beef prices increased by 7.4 percent over the past year, and pound sales of beef dropped by 6.3 percent. In contrast, pork prices increased by 0.8 percent and pound sales of pork declined by just 0.3 percent. Chicken prices increased by 4.4 percent, but chicken remains the lowest-priced meat available, and pound sales increased by just under 1 percent.

In addition to price, some consumers indicate health and nutritional concerns as reasons for cutting back on beef or meat in general.

Within the beef category, the report notes many consumers are “trading down” to lower-priced products such as ground beef instead of steak or 80 percent lean ground beef instead of 90 percent lean. Some consumers in higher income groups meanwhile, increasingly trade up to higher-priced meat items as their financial outlook improves.

The report points out that meat shoppers are a diverse group, with different priorities depending on age, gender, region and family status, but the biggest influencing factor is income. Shoppers in the low end of the income scale, with household incomes of $15,000 to $25,000 per year, include meat items in an average of 3.4 dinners per week. That number increases with every step up in household income, with those earning more than $150,000 including meat items in 4.3 dinners per week.

The recession temporarily slowed growth in the more expensive “natural” and “organic” categories, but that growth has picked up again, particularly among higher-income groups.  The percentage of people who have purchased natural and organic rose to 26 percent in 2013, and nearly one-quarter of current shoppers expect they will purchase more natural and organic meat and poultry. The main reason consumers purchase these products is a perception they have positive long-term health benefits.

The authors point out that the industry and retailers have an opportunity to boost sales by educating consumers about meat and meat preparation. For example, survey results indicate 40 percent of consumers consider themselves “very knowledgeable” on how to prepare beef, pork or lamb, while 49 percent say they manage and 11 percent say they could use help. Thirty-one percent consider themselves very knowledgeable about the USDA grading system while 54 say they get by and 15 acknowledge they could use help. Just 21 percent consider themselves very knowledgeable about the nutritional content of different cuts of meat, while 59 percent get by and 20 say they could use help.

The full report is available for purchase from the Food Marketing Institute.

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c. andrews    
chicago-kansas  |  February, 28, 2013 at 09:35 AM

great information thanks

Sally Shopper    
Cleveland  |  February, 28, 2013 at 10:29 AM

From weekly shopping I can tell you retail beef prices have increased roughly 50% in the past 2 years. That's the very real experience in supermarkets around here. And quality has not noticeably improved, nor is there any other justification for paying so much more for the same old fare. In fact, some ground beef seems to be poorer quality as meat departments grind unsold out of date cuts. I purchased a pack of ground beef for $3.99/lb because that was "on sale" but it smelled and tasted funky. No more of that nonsense -- we're eating more pork and for the first time a lot of chicken. It is remarkable how quality of chicken has improved! Why are beef producers shooting themselves in the foot lately? They need to take a lesson from JC Penney, who learned when you furlough your customers it is practically impossible to get them back. I know we find no reason to go back to eating beef around home unless it saves us money. Pork and chicken are really just as good, if not better in some respects. I look forward to grilling pork and chicken this summer!

John Maday    
Colorado  |  February, 28, 2013 at 11:47 AM

Sally: Beef prices certainly have gone up over the past two years, but the increase is closer to 14 percent based on the USDA’s Consumer Price Index for Food. That’s a national average of course, and the increase in your area might have been more, but if it really is 50 percent, I’d look for a different store. The reason for the increase is simple economics. Severe drought in key cattle areas over the past three years has caused a dramatic reduction in cattle numbers, meaning less beef on the market and thus, higher prices. Also, international demand for U.S. beef has grown significantly due to its superior quality, resulting in higher domestic prices. As for your quality concerns, numerous research studies including the National Beef Quality Audit, which takes place every five years, have shown continuous improvement. USDA quality grades are higher while excess fat has been reduced and beef cuts have become more consistent. If your local grocer is selling spoiled beef in their meat case, the fault lies with the grocer, not the rancher. Again, I’d shop at a different store. John Maday

West Virginia  |  February, 28, 2013 at 03:42 PM

Telling Sally she's wrong...and a poor shopper is, well, probably not our best strategy for dealing with customers (and increasingly, ex-customers). If you had thrown the USDA CPI up into my wife's face she might drag you into the store and rub your nose in some harsh reality. I speak from experience when I tell you that is no fun at all and not productive either.

Ohio  |  March, 01, 2013 at 07:22 AM

Your headline is wrong. Consumption is down because production is down. We can only consume that which we produce. Prices are up because of supply shortages. Prices are the effect not the cause. Price is the intersection of the current demand and the supply curves. If you do not understand economics then ask some one who does, don't just make it up.

March, 01, 2013 at 07:42 AM

Sally, I believe you are correct on ground beef. Ground beef has increased more than the rest of the beef mix. Due to the ever persisting poor economy demand has moved down the product list. We tend to buy more ground beef and less steaks to make our money go further. This has caused ground beef to double in price while filets, prime ribs, and strip steaks have remained " relatively " flat but still up slightly. That price of the higher priced cuts are averaging down the total beef price increase. For our typical ground beef customers this add insult to injury as they (we) suffer the most from the price increase.

Pete McD.    
March, 01, 2013 at 08:27 AM

I fear our beef will become a luxury item after all this. Coming out of the last great depression in the 30's pork was the mainstay and beef a distant second. Chicken was the luxury meal. Now chicken competes our pants off and pork is a stronger competitor than ever. Soon the richest 1% will conspicuously consume the very finest cuts of beef and what they don't want will get shipped to hotdog & bologna makers to feed poor people worldwide. Our American middle class will love pork and chicken just like we do canned beer and nachos. Eating beef will be wonderfully snobbish like eating organic truffles while wearing a Rolex.

Austin, TX  |  March, 01, 2013 at 11:28 AM

Now that you mention it, this looks like it could be a serious problem headed our way. Beef prices are soaring out of reach as you say and so too is dairy. How long before the good old cheeseburger gets displaced by chicken fingers? Already gotta be more profit margin in selling a sandwich made out of affordable chicken than one made out of expensive beef and cheese. Consumers don't really mind eating chicken and restaurants have their own problems so they don't care anything for the plight of beef producers. They will drop us in a heartbeat if we keep on overcharging for beef and dairy. No one to blame but ourselves when it happens. Maybe its too late already?

SD  |  March, 01, 2013 at 02:52 PM

There are some quite confusing comments, or confused people commenting??? FACT: food still remains a good buy with consumers in the USA able to buy their food for about 10% of disposable income (based on median income if memory serves). Yes, some beef may be somewhat higher priced than it was a few years ago, for many reasons. NONE of the reasons being because "we (farmers/ranchers) keep on OVERCHARGING for beef and dairy". That is ludicrous! Cattle are a commodity, as is milk. Farmers and Ranchers sell on a buyers market, meaning we can only accept what is OFFERED for our product, tho we can and do TRY to get the highest price available for the quality food we produce. It is quite accurate to say farmers and ranchers are the only business that "buys our inputs at retail, and sell our products at wholesale".......and topping that, too many of our customers (food consumers) criticize us IF we make a profit, or ACCUSE us of it, as it PROFIT is a dirty word, somehow! Shoppers tell me that SAMS clubs and Costco have very high quality meats at reasonable prices.

Kansas  |  March, 01, 2013 at 06:23 PM

Where is all the brilliant marketing advice. Sounds like right now is when we need it. What do you want to bet in a couple years we will be looking back wondering what the hell happened to our market share and some genius market consultant will smugly point out how incredibly terrible our timing was in 2012-2013 when, as incomes fell, taxes went up, unemployment raged we alienated our customers by shorting the market and driving beef & dairy prices up faster than every other class of food. You know we are going to look at the guy and facetiously say "well duh, do you think?". So what can we do right now?

SD  |  March, 04, 2013 at 07:04 PM

How are we "shorting the market"? How does the availability of beef compare with a couple of years ago? Even with less cattle, the pounds per carcass is much higher than in the not so distant past. And it should be higher because of all the cattle sold only because of the drought in such a large area of cattle and feed growing areas. So, is there a shortage of beef, or is it that people don't want to pay the higher cost, or can't? We really need to counter the negative, and largely false publicity claiming that beef is less beneficial to health than other meats. Beef has far better nutrient profile, and even the fat in beef is more beneficial to health than some 'experts' want to admit.


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