Animal Protein Demand
In 2022, meat sales reached a record $87 billion, a 6% increase over the previous year. This happened despite a 3% volume decline, about 600 million units, year-over-year. Data included fresh beef, chicken, pork, and turkey.
“I think overall, it is clear consumers are willing to spend more at the meat counter,” Earnest said. “Beef demand has been exceptional.”
For context, retail beef consumption declined from 2009-2015 as prices climbed an average 7% per year, according to USDA data compiled by CoBank. In response, retail beef prices slowed from 2015-2017, rising 2% on average.
Since the pandemic, beef disappearance has not slowed, despite retail prices increasing 9% or more each year.
Animal Protein Production
Protein production is expected to moderate after years of growth. Beef is going through significant supply constraints after intense drought forced ranchers to sell off their cattle herds. Cattle slaughter increased more than 11% in 2022 compared to the prior year. The national herd count was down 3% as of Jan. 1.
Pork is seeing a moderate rebound. Despite hog inventories being down, growth in the breeding herd size suggests potential growth in the back half of 2023. Rising feed costs are hampering chicken growth this year after stronger than expected production in 2022.
Summer Grilling
For a bacon cheeseburger, meat cuts and formulations are looking favorable ahead of the summer months. Beef grind formulations are above historical norms, but lower than when they peaked in 2020, especially for 50s. Recent data show they are going for less than $125 per hundredweight. Meanwhile, the pork belly primal is down 20% compared to a recent 5-year average. It is valued at roughly $100 per hundredweight.
For middle meats, such as ribeye and brisket, prices are above the 5-year average from 2017-2021, but lower than what they were in the fourth quarter. Ribeyes have declined in value since January 2023, but are starting to rebound. They are valued at roughly $450 per hundredweight. Briskets steadily declined last year, but they remain 17% above the 5-year average. Recent data show briskets valued less than $200 per hundredweight.
Audience Poll
What animal protein will be most popular this grilling season? Most attendees selected beef as their favorite, followed by chicken and pork. Michael Nepveux, Lead Protein Analyst at Stable, and Earnest agreed with the audience consensus.
Overall
Macro conditions are continuing to pressure consumer spending, but so far, meat demand has been stronger and more resilient than expected. Earnest said the grilling season will be full of challenges as producers continue to adjust to inflation.
