Herd expansion leads to more U.S. beef consumption -

The forecast was made in the March 2016 World Agricultural Supply and Demand Estimates from the USDA. In 2015 the per capita use of beef was 53.9 pounds per person. With U.S. production jumping from 23.7 billion pounds in 2015 to an estimated 24.6 billion pounds this year, the per capita consumption forecast jumped almost half a pound per person.

David Cooper

Managing Editor / Progressive Cattle

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Consumption of beef on an average per capita basis has declined in the U.S. steadily since the 1970s, as consumers have jumped onto a chicken bandwagon for issues related to price, diet and supply. Overall beef consumption dropped from 27.9 billion pounds in 2002 to 24.1 billion pounds in 2014, according to the USDA Economic Research Service.

The intensified focus by the beef industry to expand after droughts subsided in 2014 has boosted overall supply, and made the protein more affordable at the grocer. A pound of ground chuck went for $4.40 a pound in February 2015, but dropped back under the $4 threshold to $3.94 12 months later.

Kansas State University ag economics professor Ted Schroeder said increased beef production and herd expansion are clearly leading factors for more beef consumption. Now there is a modified per capita consumption expected as beef supplies increase.

“What happened is in the last few years, we’ve had a lot of people walk away from the product altogether,” he said. “Those left were paying more for a smaller piece of the product. Loyal consumers and those willing to pay more for the product continued to buy.

“Now, as we expand the herd, it takes awhile for that expansion to be available in the market. We’re getting to that point. We’re seeing the expanding beef availability and we’ve had some weaknesses in the export trade, and seeing more of it.”

All the factors make the price point for beef available at the store much cheaper than it was a year ago, Schroeder said, and it could get even cheaper. He said the next six months, and possibly longer, will be a defining stretch for the consumer.

“Ground beef has remained pretty robust throughout and [demand] continues to grow,” Schroeder said. “We’re grinding beef in forms we weren’t before and that’s continuing. The ground beef market was resilient. It declined some but not like the steak market. That’s the one that’s going to come back, but gradually.”

While the beef industry will routinely cut its herd sizes when weather factors and feed availability tighten, Schroeder said experts recognize that the industry in its last contraction went deeper and longer than in the past.

“We delayed expanding by a long ways, typical to what we usually have done,” he said. “Finally when it started raining and about the same time that started happening, we were having record high prices because supply was tight.”

The steep market corrections that hit producers in mid-2015 have pushed the pendulum back, which means producers will face some tight months ahead. But that will be good for consumers who want to come back to buying beef.

“Those who enjoy beef and couldn’t afford it, they come back quickly because they missed it. It’s a highly preferred product for many Americans. So some come back quickly. Some others may have adjusted their diet or typical cooking processes.”