The decline in beef consumption was a result of tight supplies. With production and imports down and exports up, beef supplies available for domestic consumption were naturally down more than 6%.
In comparison, pork and poultry consumption both increased with larger supplies. Per capita pork consumption was up the highest level since 2009 (17.9 kgs). The gap between per capita beef and pork consumption narrowed to 0.6 kg compared the ten-year (2005-2014) average of 3.5 kgs. Per capita poultry consumption increased for the fourth year in a row. Per capita poultry consumption is more than two times the amount of beef.
While Canadian consumers may not be eating more beef, they are paying more for it. Consumption is a function of supply, what is produced domestically and what is traded. Hence, global supplies that influence trade can have an impact if product is bid away from the Canadian consumer. Consumption does not reflect the changes on a value basis and lower per capita consumption does not necessarily indicate declining consumer demand. Consumers bid with their food dollar.
So despite the decline in consumption, the deflated per capita expenditures for beef were up 5.6% at $234 in 2015 as prices increased 14%. Beef continues to account for the largest share of Canadian’s total red meat and chicken expenditures, followed by chicken then pork.
Per capita beef expenditures have actually been increasing in recent years. While consumption declined over the past five years, consumers increased their spending on beef with prices up 38%.
Beef demand has been strong domestically and internationally. The strong increase in beef prices and expenditures would not have happened if consumers had not been willing to pay for it. The retail beef demand index measures consumers’ willingness to pay by evaluating the percentage change in per capita consumption and deflated retail price. In 2015, retail beef demand increase 6.7% to 123 (Index 2000=100). This is the strongest demand since 1989. In fact, beef demand has been strengthening over the past five years and is now 27% above the 2010 low.
International demand for Canadian beef has also been strong, with tight global beef supplies and growing demand from developing countries. With beef exports up 1% in volumes and 15% in value in 2015, the international demand index increased 13% to a new high of 118 (Index 2000=100). This is the sixth straight year of an increased international demand, and the index is now 85% above the 2009 low.
Source: MeatBusiness