A livestock economist says record-high beef prices haven’t had the impact on other proteins the industry expected. Jaime Luke with Michigan State University says beef demand hasn’t softened.
“Consumers have really surprised us as analysts in how resilient their demand for beef has been,” she says. “Now that doesn’t mean that they may be purchasing the same portfolio of beef products as they did in the past. So maybe if you wanted to put a steak on the grill, you’re choosing ground beef now.”
Luke says she was expecting to see some spillover demand this year for pork, but that has not been the case.
“If you are a more price considerate consumer, you are more likely to be switching over to the chicken category and maybe not so much pork,” she says. “We’ve seen strength in chicken prices and not so much on the pork side at the same time.”
EDITOR’S TAKE:
It is normal for consumers to alter their preferences when prices for their number one choice become too high. In the case of beef, demand is very inelastic, meaning it is a very strong preference and not easily changed. Thus, beef producers continue to benefit from strong prices at both retail and farm gate levels. As we have stated several times in the past, beef producers deserve a spot at or near the top of your ag customer prospect list. They will be prime candidates to purchase a truck this year and use the IRS section 179 depreciation advantage to lower their tax obligation.
