Consumers are showing no signs of sticker shock when it comes to beef demand.
USDA reports retail beef prices for July hit record levels, closing in on $9 per lb. That’s a sharp increase from last month’s record.
Patrick Linnell, director of market research with CattleFax, says consumers just continue to pay higher prices for beef.
Retail Beef Prices Hit Record in July
“The July data that just came out showed a 27% increase from the month of June, up to $8.90 per pound for beef,” he says. “The consumer’s demand for beef is just relentless.”
The retail beef price is also up 9.2% from last year, with individual cuts also setting records — including ground beef at $6.25 per lb.
“You dive deeper into that report and really all categories of beef continue to point higher. Choice beef was up almost 15% and ground beef up 14%,” Linnell says.
The strong demand for beef is tied to several factors:
High Quality of Beef
For years, cattle producers and the cattle industry have worked on genetic improvements to upgrade the eating experience.Linnell says, “I think that goes to just the continued quality improvements that we’ve had in the recent decades — record percentages of choice in Prime and upper two-thirds Choice. With a better quality product, you can gain a higher price.”
Protein Craze
The current protein craze is also a contributing factor, according to Linnell.“Some of the cultural movements — valuing protein in the diet, including the weight loss drugs and cultural attitudes toward protein. I think beef is a major beneficiary of that.”
Strong General Economy
However, the economy and low unemployment rates are also supporting consumer spending for beef.Kent Beadle, Paradigm Futures, says demand is helping to drive the higher cattle prices.
“We are waiting for the consumer to balk. That’s really the only thing that’s going to turn beef prices lower is when the consumer says no more,” he explains.
So, as long as that demand holds, it will help keep cattle prices strong.
Beadle adds, “That’s the driver. We just don’t have enough supply for the demand that we have for beef in this country.”
And that won’t change overnight.
