Report: Consumption shift in beef requires more cost control
Rabobank has published a new report on the U.S. cattle industry, calling for changes in the way beef is produced in order for the industry to remain competitive.
In the new report, "Ground Beef Nation," Rabobank says that changing consumer preferences and a production model tailored to production of top-shelf steaks has put the U.S. cattle industry in a position of losing market share to competitive proteins.
"Under the existing business model, the U.S. cattle industry manages all fed beef as if it were destined for the center of the plate at a white table cloth restaurant," Rabobank cattle economist Don Close said in a news release. "The industry is, essentially, producing an extraordinarily high-grade product for consumers who desire to purchase a commodity. More than 60 percent of U.S. beef consumption is ground product. If the U.S. cattle industry continues to produce ground beef in a structure better suited to high-end cuts, the result will be continued erosion of market share."
The report outlines the trend of changing consumer preferences and the role pricing plays in the notable decline in beef consumption. Conversely, the pork and chicken industries have grown and become more efficient, which has made those products more readily available at competitive prices, the report said.
"The industry must change to a production model that determines the best end use of an animal as early as possible, in order to compete in a 'ground beef nation'," Close said. "A new system for end-use categorization that influences calf selection, cattle management, production costs, and feeding regimen throughout the life of the animal is vital to keeping beef competitive with other choices at the meat counter."
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