[BLOOMBERG] Americans' love affair with beef is fizzling.It's a matter of price per pound. A tasty tender cut of pork can be had for $3 to $3.50 a pound. A decent steak will run you $15 a pound. which is 4.28 to five times as much.
In the U.S., a country known for drive-thru burger joints and over-sized steaks, demand for the meat on a per-person basis is slumping to the lowest in more than four decades. With consumers bracing themselves for another slow patch in the economy, shoppers are increasingly choosing cheaper pork and chicken as alternatives.
A cow drops a calf a year. A sow has three litters in two years. A steer weighs about 1300 pounds at slaughter. A hog weighs 275 to 300 pounds, but sows are now spitting out litters of twelve, which makes 3300 pounds or so. The steer takes a year or better to slaughter, the piggies get to eat like hogs for five to six months. That's 2600 pounds of beef to market in two years, 9900 to 13,200 pounds of pork in the same period. That works out to 3.8 to five times as much poundage. (Anybody who actually raises the things can correct me if I'm wrong.)
"There's definitely been a slowdown in beef" purchases, said Derek Luszcz, the 42-year-old co-owner of Gene's Sausage Shop and Delicatessen in reliably Democrat Chicago, aka The Windy City or Mobtown
... home of Al Capone, a succession of Daleys, Barak Obama, and Rahm Emmanuel,...
, a butcher shop that also sells deli meats and other groceries. "A lot of it is about the price. People have changed their diets to different things."
People used to eat Grade A beef. Then the consumer demanded USDA Choice, then Prime, and now Black Angus. I have no idea what the actual difference is among the grades except for price, which went up continuously.
Waning consumption drove cattle futures lower by 12 percent last quarter, the biggest slide since the depths of the global recession in 2008. Money managers are signaling they expect more declines, trimming their bullish holdings to the lowest in more than two years. At the same time, the speculators expect that hog futures will start to rebound, and increased their wagers on a rally for a fourth straight week.
Smaller Herds
Both beef and pork prices soared in 2014 after years of drought whittled the U.S. cattle herd down to a six-decade low, and a piglet-killing virus tightened hog supplies. While producers of both animals expanded to capture profits, pigs multiply far more rapidly. Pork output will be a record in 2015, while beef production is set to shrink from last year. Beef's premium to pork is more than 20 percent higher than the 10-year average, and as job growth slows, Americans are opting to buy the cheaper meat.
"We saw a definitive shift in consumer buying from beef to pork" in recent months, said Christopher Narayanan, the New York-based head of agricultural research at Societe Generale SA. "That's U.S. consumers being a little bit more choosy. They weren't as confident about spending too much money."
The net-long position in cattle slid 3.7 percent to 4,721 futures and options contracts in the week ended Sept. 29, the lowest since March 2013, U.S. Commodity Futures Trading Commission data show. Hog wagers expanded 10 percent to 33,046 contracts, the highest since February.
