U.S. meat and poultry production and consumption have shifted and more changes are in the offing.
Dr. Tom Troxel
Dr. Michael Looper
The total U.S. meat and poultry output topped out in 2008 at 93.6 billion pounds on a carcass/ready-to-cook weight basis. That output level has not fallen sharply with 2011 output coming in at 92.42 billion pounds and 2012 output forecast to total 92.12 billion pounds. In spite of higher costs, U.S. producers have pretty well maintained total production levels — until now. Livestock Marketing Information Center’s forecasts 2013 and 2014 total meat and poultry output to be only 90.37 billion pounds in each year, down 2% from the 2012 level.
If projections are correct, next year will mark the first time since 1990 that Americans will consume less than 200 pounds of total beef, pork, chicken and turkey. Veal, lamb and other meats would add another couple of pounds to that total but the lesson is clear: Per cap animal protein consumption is falling.
Why the decline? One obvious reason is the growth of meat and poultry exports. The U.S. pork, beef and chicken industries all set annual export records in 2012. A growing and increasingly affluent world population continues to draw more products out of the U.S. market. U.S. consumers will have to compete with buyers in other countries for these products.
Some also argue that American tastes and preferences have just shifted against meat consumption. The loud and persistent growths of vegetarianism/veganism and Baby Boomers now hitting retirement have reduced U.S. meat and poultry demand. They are important and the second one will have a growing impact.
But we believe the real reason for the decline in U.S. meat and poultry consumption is even simpler: Americans cannot afford as much meat and poultry. This inability is driven by reduced means as a result of the Great Recession and higher prices that have been driven by higher farm-level costs. Per capita real disposable income (PCRDI) increased roughly 10% in the 5 years from the beginning of 2003 through 2007. The past 5 years have not been so kind. PCRDI finally recovered to the level of December 2007 in JULY, meaning the 5 years since December 2007 will see virtually no gain in the amount of money Americans have to spend. U.S. meat protein producers would like to sell their product at prices that U.S. consumers can better afford — but they cannot, given today’s production costs (Source: CME Group)..