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U.S. retains an appetite for red meat

The meat market is as bustling as ever. Sales for red meat are predicted to top $44 billion this year, up 18 percent in just three years and nearly 40 percent since 1999, according to a report from research firm Mintel.
/ Source: msnbc.com

The meat market is as bustling as ever.

Sales for red meat are predicted to top $44 billion this year, up 18 percent in just three years and nearly 40 percent since 1999, according to a report from research firm Mintel, which tracks consumer trends.

After a growth slowdown after 2000, the appetite for red meat spiked again last year — unquestionably spurred on by low-carb eating and the rush to try out diets like Atkins.

Beef showed the biggest jump in recent years, with sales up nearly 20 percent since 2002. Pork sales also rose over 13 percent; lamb was up more than 7 percent. One in five people said low-carb diets spurred their meat and fish intake.

Yet the gains for red meat come even as people eat less of it.  The average American consumed just under 65 pounds of beef in 2003, though the U.S. Department of Agriculture expects that to climb slightly this year and next. Though nearly nine in 10 Americans say they eat beef, consumption is well off a peak of 90 pounds or more annually in the 1970s.

Pork consumption remains near 50 pounds per capita, about where it was in the early 1980s, while lamb has dropped steadily since the 1960s to about 1.1 pounds per capita.

Worries about red meat's fat content seem to have been brushed aside. In recent years, the beef industry has waged a campaign to highlight its relative benefits compared to fish and chicken. Though three-quarters of Americans believe red meat to be less healthy than fish or poultry, the report noted, it hasn't dented sales.

Concerns remainOther health and safety concerns linger. Four in 10 people said they had concerns about the hormones found in meat and poultry. And 17 percent said they were eating less red meat because of safety concerns like mad cow — though more were concerned about tainted poultry or seafood than red meat.

The popularity has also come despite overall higher prices at the supermarket.  Despite a brief dip earlier this year, when prices were driven down by fears over the discovery of mad cow disease in a Washington state dairy cow in December 2003, consumers have been paying near-record premiums for beef. Beef makes up 70 percent of the red meat market, with pork, veal and lamb accounting for the rest.

The average cost per pound for all beef was $3.56 in August, slightly lower than $3.92 recorded last December, just before the mad cow discovery, but higher than $3.39 a year ago. A choice T-bone steak averaged $8.71 in August, nearly equaling a November 2003 high of $8.73.

Shoppers have noticed rising prices. Only 21 percent described red meat as their most economical choice.  But that isn't likely to turn people to poultry. "Consumers have indicated that they are tired of the other choices available to them," the report said.

Though chicken remains the most consumed meat, it also led among those meats consumers were most tired of eating and serving their families.  Seven in 10 people eat poultry at least twice a week, while just 55 percent eat red meat that frequently.

Beef's popularity is soaring among the growing population of Hispanic Americans. Eighty-five percent of Hispanics have beef in the house, versus 75 percent of the overall population.

'High end of prices'
Cattle ranchers have also carefully managed the beef supply, slaughtering fewer cattle to offset any possible glut. That kept prices from dropping too far in the wake of trade bans by several dozen countries after the mad cow discovery.

Beef otherwise headed overseas was loosed on the U.S. market, though many cuts were sold on the cheap. Items such as short ribs — lucrative in Asian markets but with little appeal to American shoppers — were dumped in U.S. meat cases or turned into cheaper items like ground beef.

But it may not prompt retailers, who operate on razor-thin profit margins, to ease up.

"These are probably the high end of prices," said Dave Weaber, director of research for Cattle-Fax, an industry research group. "The challenge from the consumer side is, prices tend to be a bit sticky on the high side of things."

The beef industry got good news in the past week when Japan, the largest importer of U.S. beef, reversed a 10-month ban and agreed to accept meat from cattle younger than 20 months. Taiwan may soon resume imports as well, the USDA said Tuesday, pending inspections of U.S. facilities.

Sales growth of red meat is likely to slow in the next several years, according to Mintel's projections, but will still rise to $63.6 billion by 2009.