Monday, September 15, 2014

Fat fears recede, pushing beef demand up

Even though beef prices have risen to historic highs, Americans want more, says livestock economist Len Steiner.

Speaking to a conference at Charleston, South Carolina, he said Americans are embracing research that indicates animal fat “may not be the nutritional bogeyman it’s been made out to be for 50 years . . .”

Meatingplace Magazine,  reporting on his speech to the North American Meat Association Outlook Conference, said beef prices will end this year up by 32.4 per cent over last year and continue rising by another 12.5 per cent next year.

Lower feed costs will prompt increased pork and poultry production, so he says pork prices will peak up by 20.3 per cent by the end of this year, then decline by 15.4 per cent next year. 

Boneless, skinless chicken breasts will end this year up by 5.4 per cent, then decline by 8.3 per cent next year, Steiner said.

He said beef prices have been “markedly higher than their calculations indicated they should be, even taking into consideration the tight supply situation domestically.

“The hidden factor, he said, seemed to be a shift in the demand curve: U.S. consumers are demanding their beef, even as higher prices normally would have dampened sales and consumption,” Meatingplace Magazine reports.

He says consumer demand has increased since media gave prominent coverage to a report released this March that questioned the longstanding link between saturated fat and heart disease, then in April came the release of  the book “The Big, Fat Surprise: Why butter, meat and cheese belong in a healthy diet.”

“A lot of what’s been passed on by the food nutritionists for the last 40, 50 years is simply wrong,” Steiner said.

“We have reason to believe that [a demand curve shift] is a big part of what’s occurred this year,” he said. “We can’t get to the prices we’ve paid for beef and pork this year with the old demand curve.”