This post was originally published on this site
High meat prices could drive many consumers to “trade down” to chicken, according to a report from CoBank, which services agribusiness and farm customers.
Retail sales of meat and access to high-quality beef jumped during the pandemic as people cooked and grilled their meals at home.
But with inflation at a 40-year high, shoppers are becoming more price sensitive. Grocery budgets are being stretched thin, and CoBank expects shoppers to buy more chicken as the year continues.
“As U.S. consumers notice their dollar does not go as far as it used to, they may ‘trade down’ in their protein purchases, favoring chicken more often than was the
case in 2021,” wrote Brian Earnest, CoBank’s lead economist for animal protein.
“However, we do not anticipate that the trade-off will be as severe as what happened in 2006-15 when chicken rapidly became a major presence on
quick-service restaurant menus.”
Some analysts are already anticipating that lower-income consumers will begin trading down in 2022.
Also: Analysts say this is the least expensive restaurant option to feed a family of four
Read: Tyson CEO King tells Congress to blame ‘basic economics’ for high beef prices, not Tyson
Beef producers National Beef, JBS, Cargill and Tyson
TSN,
are facing questions from Congress about anti-competitive practices including price fixing.
CoBank points out that the price of animal feed has “skyrocketed,” and labor and energy prices have risen. Higher meat prices are expected throughout 2022.
“If consumers’ real incomes continue to decline along with higher meat prices, we may finally see a significant change in consumer’s willingness to pay for red meat,” Earnest wrote.
