Sine 2000, per capita domestic spending for beef has grown at about $11 annually, and Prime and Branded sales account for 60% of those new dollars since 2005. Marbling is the difference maker.
Even as consumers are sensitive to higher prices, beef demand remains strong. Increases in beef’s overall quality and uniformity over the years has spurred that demand growth and marbling has been the difference maker.
Cattle are NOT fungible – value differences across the slaughter mix is enormous. Precision pricing – via a grid – makes a huge difference and attempts to mandate arbitrary levels of live cash trade negates that reality.
The reliability of marbling is making a difference – and cattle feeders are taking advantage. With real dollars at stake, more cattle are committed to negotiated sales and betting on the grid is paying off.
Inflation has hit food prices especially hard, but higher prices haven’t driven consumers away from beef. Why is that? The Checkoff-funded National Beef Quality Audit provides some clues.
This is the third in a series on Livestock Risk Protection. The previous two addressed misperceptions of market impact from LRP. The remaining topic – subsidy harvesting – is the most interesting and controversial.
Do cattle producers have the narrative correct regarding the impact of LRP? Some assumptions may be completely disconnected. Let’s revisit this still-kicking horse.
