At-A-Glance

• Consumers are searching for deals at the meat case , and in some cases , are opting for less expensive cuts or different proteins to save money .

• Strong consumer demand is critical to producers ’ bottom lines . While consumers have so far remained resilient in their spending , economic headwinds may start to soften demand for beef .

• Consumers are spending more on essentials and allocating less to leisure activities and dining out .

• Consumers are having to stretch dollars to make ends meet , causing them to adjust budget priorities .

• While e-commerce activity remains a viable channel for beef sales , activity has slowed from COVID-era highs .

Several factors are commonly known to impact demand , including consumer incomes , prices of substitute goods ( other proteins in this case ), availability of beef and other proteins , and consumer preferences . The National Cattlemen ’ s Beef Association ( NCBA ), a contractor to the Beef Checkoff , tracks many of these economic and industry metrics to fully understand today ’ s beef consumer .

Consumption and Sales Trends

At the meat case , retail beef prices were sitting at $ 6.48 / lb . in July 2023 , which is up 7.8 % from July 2022 . 1 Comparatively , retail pork prices have decreased by 2.8 % and retail chicken prices have decreased by 3.7 % in the same time frame . 1 These retail price increases for fresh beef have helped support dollar sales , which have risen 4.3 % from July 2022 to July 2023 despite a decrease in pounds sold in the same time frame . 1 Pounds of chicken sold increased while overall sales value decreased , and pork sales decreased in terms of both pounds and sales value from July 2022 to July 2023 .

Meanwhile , per capita availability of beef is expected to decrease during the second half of 2023 and is projected to be down 3 % annually from 2022 . 2 These decreases in availability are expected to continue through the end of 2024 and will drive beef prices

higher in consumer markets . Broiler per-capita availability is expected to increase slightly from 2022 to 2023 and then remain constant through 2024 while pork availability is expected to see slight decreases from 2022 to 2023 and from 2023 to 2024 . 2

The decrease in per-capita availability for beef will support higher prices moving forward , which may drive consumers to less expensive protein choices . While retail beef demand has held steady so far , chicken and pork are positioned to potentially shift consumers away from beef due to their lower ( and decreasing ) prices .

Consumer Economic Trends

Consistently high prices across multiple sectors of the economy are impacting consumers purchasing power at the supermarket . As of July 2023 , overall food inflation was at 4.9 % ( 12-month percent change ) which was largely driven by food away-from-home ( foodservice ) inflation (+ 7.9 %) and jumped above food at-home ( retail ) inflation rates (+ 3.6 %). 3 As food inflation rates continue to be persistently high , consumers will likely be placing increased weight on price when making food purchases .

As the cost-of-living increases , it is important to consider if consumer incomes are keeping pace . Typically , increasing discretionary income can be translated into a greater ability to purchase beef , making it a key metric for the beef industry to track . As Figure 1 shows , real disposable incomes have currently increased ( albeit slightly ) for 10 of the past 12 months after decreasing for much of the latter half of 2021 and the former half of 2022 . If this trend of income growth continues , consumers may begin to feel some relief from high prices .

Figure 1 Continued on page 32

30 NATIONAL CATTLEMEN DIRECTIONS 2023