Meat, dairy demand remains strong amid price volatility
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DAN GRANT
FarmWeek
The high food price environment forced many consumers to reevaluate their spending in recent years. But it hasn’t chased them from the meat or dairy aisle.
Sales of red meat, poultry and dairy products remain strong as consumers around the world look to get the most nutrition out of each food dollar, according to industry experts.
In fact, U.S. beef and dairy exports set new records in 2022 while pork exports were the third-largest on record, according to the U.S. Meat Export Federation (USMEF) and U.S. Dairy Export Council.
“2022 was a groundbreaking year for U.S. beef’s international presence, with global demand stronger than I’ve ever seen in all my years in the industry,” said Dan Halstrom, president and CEO of USMEF.
Beef exports set records for both volume (1.47 million metric tons) and value ($11.68 billion) in 2022, up nearly 40% from the five-year average.
Meanwhile, U.S. dairy exports surged to a record $9.6 billion last year. Cheese sales alone nearly topped 1 billion pounds.
“We all know about inflation. The question is, will consumers continue to buy dairy products,” said Mike Hutjens, University of Illinois Extension dairy specialist and professor emeritus.
“The last half of 2022 dairy consumption only went down about 2%. Some people were surprised it didn’t go down more as the cost of those products was up about 22%,” he noted. “It shows consumers, even though they paid more for dairy products, are still willing to buy just about what they did in previous years.”
USDA predicts the all-milk price could decline from an average of $25.55 per hundredweight in 2022 to $21.60 this year, which could ease inflationary pressure on dairy items.
But, lower milk prices could also result in a smaller dairy herd. Dairy cow slaughter was up 8% during a recent four-week stretch, according to the CME Group’s Daily Livestock Report.
So, why have sales of dairy products remained so strong amid the price volatility?
“Dairy is a great bang for the buck,” said Molly Pelzer, CEO of the Midwest Dairy Association. “Consumers are looking at their (food) dollar differently and they understand two things about dairy — it’s delicious and nutritious.”
As for U.S. pork exports, sales reached 2.67 mmt last year valued at $7.68 billion, down 5% from the 2021 record. But pork sales to Mexico surged 10% to a record $2.03 billion.
“The Mexican market has been a star performer for U.S. pork for many years, but the 2022 results were truly remarkable,” Halstrom said.
At the local level, operators of many meat processing companies continue to report phenomenal demand for services as consumer interest in local freezer beef, pork and other products continues to grow.
“I have a standing waiting list so even when there’s a cancellation, we get the spots filled,” Cassie Rea, manager of Farmhouse Meat Co. in Carthage, told FarmWeek.
Alternative competition fizzles
Meanwhile, as many consumers look to maximize their protein purchases at the meat counter, their appetite for alternatives fizzled in 2022.
The Washington Post reported retail sales of plant-based and high-tech meat substitutions dropped more than 10% in the past year following steady growth in the early stages of the COVID pandemic.
Prices, nutrition and value for the dollar are among the reasons consumers decided to stick with the real thing when it comes to meat purchases. The cost of plant-based meat is still about two times higher than beef while alternative chicken is about four times as high, the Post reported.
While investment in alternative proteins continues, JBS SA announced plans last fall to shutter its two-year-old Planterra Foods U.S. plant-based meat operation. McDonald’s also recently discarded plans to roll out a McPlant burger nationwide.
Overall, an Elanco Animal Health executive projects sales of plant-based meat will remain about 1% of the market through 2027 while meat demand continues to grow.
This story was distributed through a cooperative project between Illinois Farm Bureau and the Illinois Press Association. For more food and farming news, visit FarmWeekNow.com.
