All the delicious ways to enjoy beef (hello, BBQ!) are perhaps just one reason why retail demand for beef has remained relatively unshakeable, even in the face of increasing prices.
There are, potentially, very good reasons for that — taste and people’s enjoyment of beef are only two factors. One of the driving reasons for beef’s retail longevity is that, although the price has increased over time, so have consumer incomes relative to the cost of a pound of beef, says Lance Zimmerman, senior analyst – animal protein with Rabobank.
With the continued pressure on the cost of living, that could change. If household incomes begin to slide, strong demand for beef will eventually be eroded as well. Put simply, so long as consumers’ household income stays stable, beef demand — even at higher prices — has real sticking power.
There is the other side of the equation as well: supply. Tight supplies do typically support prices for feedlot and cow/calf producers, but grass growth, cost of inputs, and overall profitability factor in, longer-term, Zimmerman adds. There’s always the question of too-tight supplies leading too-high prices eventually eroding demand.
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