Myth: The price of beef has made people eat less beef.
The Facts: Consumers are seeing higher food prices when shopping and dining out, but despite the increased cost of beef, Americans are still consuming all of the beef being produced in the U.S. People around the world are consuming the entire inventory of delicious steaks, roasts and ground beef available today, even at higher prices.
This shows us that beef demand is high. What do we mean by that? Demand refers to consumer preference and desirability for a good, in this case beef. Demand is calculated by economists using a demand index which takes into account a consumers’ willingness to purchase a product based on its price and their income. In beef’s case, prices have gone up, while consumer incomes haven’t. Yet, consumers continue to purchase beef despite its higher prices, which is an indicator of strong demand for beef. This is counterintuitive to what you typically see in demand. Consumers are usually willing to purchase less of a good as the price increases and more as price decreases.
Media stories refer to the record-high cost of beef, but what isn’t reported is that beef is right in line with overall food price inflation. The USDA forecasts the cost of all food to increase 2.5 to 3.5 percent this year, and beef specifically 3 to 4 percent. If you look at beef prices at retail so far this year, you would see that, on average, the price per pound is up about 3.4 percent, which amounts to about $0.15 more per pound. This is based on actual scanner sales at grocery stores and supermarkets across the U.S., i.e. the price consumers pay at the checkout line. In other words, a family of four can enjoy a beef meal for just a little over a dollar per serving.*
Americans love beef, and sales show they believe it’s a high quality protein that’s worth it. In fact, a recent survey showed consumers were willing to pay $6.59 per pound for a steak and only $4.86 for a chicken breast and $3.55 for a pork chop.
If you’re looking for ways to save on beef, check out this Six Ways to Save on Beef infographic.
For more information, visit these resources that further explain demand:
*Based on the current retail price for beef of $4.45 per pound. Compared to the same time period a year ago.
Original post from FactsAboutBeef.com.