Don’t let beef consumption numbers get you down. CattleFax senior market analyst Kevin Good said the proof is in the numbers.
"As we think about it from a per capita supply basis consumption and production are pretty close together when you add in and subtract exports and imports," Good said. "So we’ve had a pretty big decline in per capita supplies over the past couple of years and that’s been the engine that’s drove prices higher."
But that doesn’t mean people like beef any less. 2014 beef demand was strong in retail, food service, and export, Good says. Lower fuel costs help spur restaurant traffic and beef sales.
"As you think about that the average driver will save about $600 this year just because of lower gas prices," Good said. "Well there’s a very strong correlation if gas prices go down the average consumer will spend more time, they will go out to eat, and that really does help that restaurant trade."
And the beef industry has done a better job of responding to consumer demand. CattleFax says that’s key to building future consumption.
"The driving point there is we look at the long term plan as far as improving demand it’s quality and consistency," Good said. "And as you look at it from a quality stand point, cattle today, the year over year increase in grade between 2014 and 2013 is about 2.5 percent more cattle grading choice. The prime grade is up as well. So the quality component is becoming more and more evident. We got a more consistent product as we take that to both retail and food service and demand was strong last year."That’s not only a boon to domestic demand, but also world-wide trade.
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