Cost, price, value matter to U.S. consumers, too

News
Jan 4, 2014
by WLJ
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When cattlemen get together, talk soon turns to prices. Yes, some will be on what the calves sold for or the price of fed steers. But quickly the conversation will shift to the other dollar figure—costs—what land prices have done or the cost to maintain a cow or the cost of gain in a feedlot. Those high-dollar marks say we have entered a new era in the cattle industry.

What you likely did not know is how all of this relates to what the consumer is paying for beef today. As we entered the December holiday season, the average Choice grade retail beef price was at an all-time monthly high of $5.41/lb. That was 5.9 percent higher than the previous year and 80.3 percent higher than the 2000 price of around $3/lb.

You may wonder how that compares to other proteins. Pork is tagging along with a similar increase; its December, 2013, average retail price of $3.78/lb. being up 8.6 percent from 2013 and up 50.4 percent since 2000. Beef’s challenge is clearly poultry; the composite retail broiler price in December was $1.96/lb., up just 1.1 percent from 2012 and only up 30.6 percent since 2000. Turkey averaged $1.72/lb. in December.

Another interesting way of looking at this is the Cattle-Fax comparison seen below in Table 1. In 2000, beef was 7 percent higher than pork and 78 percent higher than poultry, but by the end of 2012, beef was 35 percent higher than pork and 148 percent higher than chicken.

The message this sends to cattle producers is pretty simple: even though beef is a much desired protein, we had better produce a quality eating experience that makes it worth the price. — Larry Corah, Vice President, Certified Angus Beef LLC

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