TODAY’S RETAIL BEEF PRICES AND PRODUCT VERSATILITY MEAN BETTER VALUES FOR CONSUMERS

"Today’s retail beef prices combined with the versatility of the product make for a great value, especially as we near Labor Day -- one of the last big grilling weekends of the year," said Mary Adolf, vice president of consumer marketing for NCBA. "Considering more than 70 percent of the total U.S. beef volume is sold at the retail level, we expect millions of consumers to visit their local supermarket in the coming weeks for great deals on fresh beef."

While beef prices have dropped in the past five years, prices for other food products have increased considerably. According to the U.S. Bureau of Labor Statistics, the price for one dozen Grade A eggs jumped more than 33 percent in recent years, up from $.87 per dozen in 1993 to $1.31 per dozen in 1996. The price of apples rose from $.78 per pound to $.89 per pound during the same time period. Prices for all-purpose flour, bread, and most other fruits and vegetables also have increased since the mid 1990s.

Beef consumption continues to outweigh that of any other competitive protein. The USDA estimates the 1998 per capita consumption of beef will reach more than 64 pounds -- its second highest level since 1989 -- and will contribute to a nearly 4 percent increase of total red meat consumption from last year. Sixty-four pounds of boneless weight beef equals about 47 pounds of cooked beef per person per year -- or 2.1 ounces of cooked beef per day. That easily falls within the USDA’s recommended daily allowance of three to six ounces of protein foods each day.

The U.S. beef industry is the largest segment of the U.S. economy, comprising 17.5 percent of the gross national product and contributing $153 billion directly and indirectly to the national economy. The beef industry also provides more than 1.6 million jobs for Americans.

Current Beef Supply

• The U.S. beef industry is facing its largest beef production levels since 1976, with total production for 1998 projected to reach more than 25 billion pounds. This continues a three-year trend of U.S. beef production levels over 25 billion pounds annually.
• While the normal 10-year production cycle would indicate a decline in beef production this year, additional factors are contributing to this high supply time:
• Drought conditions in major cattle producing areas such as Texas and other southwestern states, lower grain prices, and heavier weights of fed cattle have resulted in higher than expected beef tonnage in the marketplace.
• The financial crisis in Asia has slowed beef and beef by-product exports, and has reduced the tonnage of beef going to Asia at lower values. Other beef producing countries such as Australia, New Zealand and Canada also have reduced exports to Asia and are looking to the U.S. market to sell their products.
• Beef production is expected to continue at higher than expected rates for the next three to four months.

What Do High Beef Supplies Mean for Consumers?

• More than 70 percent of the total U.S. beef volume is sold at retail, and the recent supply situation has resulted in lower retail beef prices. That means better beef values for consumers.
• According to the U.S. Department of Agriculture, prices for all retail beef (which includes Choice, Select and ungraded cuts) averaged $2.54 per pound during the first six months of the year, compared to $2.71 per pound five years ago.
• The average price for Choice cuts of beef is at its lowest level since 1989.
• Retail beef prices are expected to remain relatively low through the remainder of 1998, then increase gradually through the turn of the century as beef supplies level off.
• Armed with just $10, consumers can purchase one pound of ground chuck, 1¼ pounds of boneless top sirloin steak, and 1½ pounds of boneless beef chuck shoulder steak.^* Meals made from these three cuts alone provide 14 servings -- enough to feed a family of four for three nights and then some.

* ^{Based on average retail prices in Chicago.}

- NCBA -

• The U.S. cattle industry is the largest segment of the U.S. economy.
• It comprises 17.5 percent of the gross national product.
• It also contributes $153 billion directly and indirectly to the national economy.
• While the U.S. has less than 10 percent of the world’s cattle inventory, it produces nearly 25 percent of the world’s beef supply.
• The beef industry forms the largest part of the U.S. food and fiber industry, which is the largest segment of this nation’s economy.
• The U.S. cattle industry is made up of more than 1 million small businesses -- farms or ranches -- operating in all 50 states.
• In 1998, there were an estimated 99.5 million cattle in the U.S.
• In 1996, sales of cattle and calves totaled $31 billion.
• Eighty percent of cattle businesses have been in the same family for more than 25 years, and 10 percent have been family-owned for more than 100 years.
• More than 1.6 million jobs are provided through the beef industry.
• These jobs include farmers and ranchers who produce feeder or breeding cattle; stocker operators; cattle feeders who bring the cattle to market weight; as well as hundreds of various allied industry partners and companies.
• The cattle industry also generates a substantial ripple effect in the U.S. economy. One dollar in cattle sales generates approximately five dollars in additional business activity.

- NCBA -

More than 70 percent of the total U.S. beef volume is sold at the retail level, making this channel vitally important to the success of the beef industry.

Beef has been a main component of American diets for centuries, and consumer purchase patterns show no sign of that stopping.

Consumption Trends

• Nearly nine out of ten households -- or 234 million consumers -- will serve beef in the next two-weeks.
• Over the last year, consumers spent $365 per household on retail meat purchases, with beef accounting for nearly half of total meat purchases.
• Beef consumption (boneless weight basis) for 1998 is estimated to be more than 64 pounds per capita, compared to 50 pounds for chicken and 49.6 pounds for pork.

Nutrition

Beef’s Appeal