January 31, 2023

 

Global beef demand set to decline further this year 

 

The world's consumers have been reducing their consumption of meat since the beginning of the pandemic, and all signs point to a continued decline in beef demand this year even as inflation eases, especially in some of biggest meat eating countries, Bloomberg reported.

 

It is not uncommon for meat consumption to fall during economic downturns. But the difference is that demand for beef is falling faster in many countries where it has traditionally been the protein of choice.

 

In Brazil, consumption was on track to set a new low in 2022. Data from NielsenIQ showed US shoppers cut back on purchases by more than 4% in the last year, while British sales of beef roasts and steaks have dropped.

 

No country captures the trend better than Argentina. The Argentine barbecue is so deeply ingrained in the national fabric that it has proven resilient to belt-tightening even during the worst recessions. Recent price increases of beef in the country, which has long been known for eating the meat than almost anywhere else in world, are forcing consumers to switch to chicken, which is now competing for the title of the country's top protein.

 

The US Department of Agriculture (USDA) forecasts roughly flat global consumption in 2023. However, there is a significant drop in some of the largest beef markets. The agency estimates a drop of more than 2% in Argentina. Demand in the US is expected to decline by nearly 5%.

 

It can be difficult to accurately capture the drop in demand because most forecasters base their consumption estimates on meat production. Some of the best indicators of dwindling beef interest come from a combination of retail sales tracking and anecdotal information.

 

Changing demand signals headwinds for the world's major beef producers, including JBS and Tyson Foods. The companies have also faced herd-shrinking droughts, higher input costs, and increasing investor pressure to produce meat in a more sustainable manner.

 

In the UK, data compiled by farm adviser AHDB showed that beef purchases at grocers and restaurants there have fallen 5.8% year-on-year, with sales of roasting joints down 22%. Steak purchases fell by about 19%.

 

Many economists believe that consumption will increase in some areas over the next decade as the population grows and consumers in Asia and other emerging markets consume more beef.

 

In Argentina, beef industry group Ciccra said per capita beef consumption in the country is expected to reach 47.2 kg by 2022. That is a major decline compared to the modern-day record beef consumption of 68.7 kg set in 2007. Meanwhile, consumption of chicken has increased to nearly 46 kg from around 18 kg two decades ago, owing to its competitive price, according to data from the Rosario Board of Trade.

 

-      The Straits Times