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Image via themeatmarket.com While poultry sales have risen, Fresno’s the Meat Market notes that beef sales should continue to dominate with consumers.

published on June 6, 2019 - 1:59 PM
Written by Frank Lopez

With the grilling season upon us, Fresno’s infamous summers are right around the corner. Folks are gearing up for days at the lake, trips to the beach, and of course, summer grilling.

Many of the popular ingredients used in summer barbecues are grown and raised here in the Valley — corn, zucchini, squash, as well as beef and chicken — are all popular staples during the grilling season. Sales for all kinds of proteins go up during the warm season.

Just a few years ago beef sales in the U.S. were going down, with chicken beating beef sales for the first time in 100 years in 2012, according to a study From the Earth Policy Institute, a non-profit environmental organization.

In 2015 beef supplies were tight, but there has been an increase in beef consumption since then. With rising prices for beef as an indicator, demand is up.

According to the Beef Demand Index of December 2018, retail beef demand is 15% higher than in January 2012.

Red Meat and poultry processors, domestic and abroad, as well as consumers, will have ample supplies of the proteins, with total 2019 production expected to reach 105.570 billion pounds, according the U.S. Department of Agriculture’s Economic Research Service (ERS).

“The message that the consumer has been sending to the beef producer is to produce more beef,” said Allison Krebs, director of market intelligence for the National Cattlemen’s Beef Association. “ They do that by saying, ‘I’m willing to pay more than would be expected if demand has been constant.’ Beef production has been expanding, per-capita consumption has been increasing since 2015, and the herd has been expanding.”

Because cows are grazing animals, beef supplies are sometimes limited by the weather. Major droughts in California typically increase the costs of production and decrease the supply, and the drought years from 2011 to 2013 significantly cut back on supplies.

With wetter seasons in the last few years, grazing quality and grass availability improved, the consumer willingness to pay for supplies of beef is robust.

 

To Impossible and beyond

In today’s market, while meat and poultry processors compete against each other for a spot at the dinner table, market advancements in plant-based protein foods are giving different food options to more consumers.

Restaurant chains including Burger King, Carl’s Jr., White Castle, Del Taco, and Little Caesars’s are either selling, or have announced plans to start selling food items with plant-based hamburger patties, taco meat and sausage.

Two of the biggest plant-based protein companies, Impossible Foods, which is making the Impossible Burger for Burger King, and Beyond Burger, which makes the Beyond Burger for Carl’s Jr., are getting more attention from the media and investors because of the surge of consumer and restaurant interest in plant-based foods.

“You can’t beat these new veggie patties,” said David Colin, manager of the Hanford Best Buy Market meat department. “They’re a big thing and you can’t really taste anything wrong with them. It taste like beef, and even the chicken patties taste like chicken. Patty wise, I’d say they’re a competitor with beef for sure.”

Along with more interest in plant-based proteins, Colin said that chicken sales at the market are passing beef sales as summer nears and beef prices steadily start to go up.

With consumers being more health conscious and trying to lower their red meat consumption, Colin said they are attracted to the no-antibiotics, organic, cage-free chickens. Lower prices and the versatility of chicken is also an attractive feature over beef.

Sales for both beef and chicken run neck and neck for the Fourth of July holiday, with customers shopping specifically for those items because of the deals, but Colin said that because of the higher price of beef, there will be higher sales for beef in terms of dollar amounts.

 

Bull market

Mark Aivazian, owner of the Meat Market in Fresno, a third-generation family owned business operating since 1976, said that beef sales have been strong since the end of last year, with lots of prime rib selling for the holidays and New Year’s Eve.

Aivazian said that beef sales typically go down after January, as consumers are calming their spending, but that they start picking back up beginning in spring, especially for the Easter holiday.

“The tradition of the backyard barbecue, I don’t think that will ever die,” Aivazian said. “Especially as we get into the summer months, we just get busier and busier. June and July are our busiest months, when the weather is good and everyone is doing barbecues and picnics.”

Aivazian has noticed that there has been an uptick in chicken sales in the last few years, suspecting that consumer health choices are a motivator. But he doesn’t feel, at least for his business, that chicken sales are on the same level as beef sales.

While trade and tariff disputes have affected many agricultural crops globally, with the effects being felt by the agricultural industry in the Central Valley, Aivazian said that he is seeing the effects more on the transportation side, with new tariffs on tires driving up costs. However, as the Meat Market doesn’t export food internationally, it’s not seeing an impact on the meat supply.

Jimmy Maxey, co-founder of JD Food, a food distributor based in Fresno, said that as of the beginning of this year, sales for beef are good, and that the market is stronger than expected with a larger beef supply, and lower prices than other years.

“It seems like we have quite a bit of beef, Maxey said. “Prices should be good for the upcoming holiday. The market seems to be dropping a little bit. Naturally, the popular cuts will always be a little bit high priced, and some of the less popular cuts are the ones taking the brunt of the down market right now.”

While Maxey has noticed a strong number of sales for poultry, he says that because the Central Valley has one of the highest quality beef supplies in the world, a lot of foreign nations import beef from the region.

Maxey said that since tariffs decrease the amount of exported beef, more of it is staying at home and creates competition for other proteins such as poultry, pork and lamb.

As summer gets closer, and the weather gets warmer, it seems that consumers will have a lot of choices to put on the grill, and with new innovations in plant-based proteins, and a strong supply of beef, consumers will have a healthy market to make their choices.


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