After a Decade in the Red, American Beef Consumption Is in the Black
After nearly a decade of cutting back on steaks, burgers, and pot roast, Americans’ red meat consumption will rise for the first time since 2006, the USDA estimates. The spike seems to contradict the rising popularity of vegan grain bowls and cult veggie burgers. Some activists have even attributed years of declining meat consumption to the popularity of Meatless Monday. Does that really mean Americans have decided red meat is good for us again?
Over the years, nutritionists have driven home the idea that there are “good fats,” such as those from nuts and avocadoes, and “bad fats”—the saturated or trans fats that raise cholesterol and can be found in red meat. In 2015, the World Health Organization released a report stating that processed meats could cause cancer. An advisory committee for the new Dietary Guidelines initially recommended telling consumers to cut down on their intake of processed and red meats—a note that was deleted from the final version.
It is cost, however, not public health concerns, that appears to hold sway over whether or not Americans eat red meat today. Overall, the dietary advice around red meat hasn’t changed significantly. What has shifted is the price of beef. As the years-long droughts in the West, and in Texas in particular, begin to ease (though California isn’t out of the woods yet), water-intensive beef production has been on the rise. The most recent data from the USDA show the highest number of cattle since 2011, and with that increase comes low prices. According to the Bureau of Labor Statistics, ground beef hasn’t been this cheap since July 2014, though at almost $4 per pound, it’s still more expensive than it was pre-drought, when prices were less than $3 per pound.
A year after fast-food chains were pushing less-water-intensive chicken, restaurants are now taking advantage of the low beef cost, with promotions and new menu items, Bloomberg reported. Wendy’s and Burger King are both offering full meals of a drink, fries, and a burger (as well as chicken nuggets at Wendy’s and nuggets and a cookie at Burger King) for $4. Chili’s is offering a cheaper steak as an option for its two-for-$20 dinners.
Even outside the world of fast food, restaurants are seeing their food costs fall. Beef or steak dishes can cost a restaurant up to half the menu price for ingredients versus a pasta dish, which may have a food cost of only 18 percent, Forbes reported. Even a decline of $1 per pound makes a big difference to a restaurant’s tight margins.
But for many farmers, that Americans are eating red meat again doesn’t matter as much as what kind of meat they’re eating. As hog farmers are fond of saying, if a pig were made of pork chops, they’d all be rich. The same goes for cows and rib eyes. When beef prices went up, retailers focused on ground beef—mostly in the form of hamburgers—to keep customers coming in, financial services group Rabobank found.
Especially during a recession, diners gravitate to the $10 burger over the $30 steak. But steak, with its high margins, is where the money is made in the beef industry. Owing to the increased demand for hamburgers, “ground beef prices were up 87.5 percent, compared to 45 percent for steak,” between March 2010 and March 2015, Quartz found. “You don’t raise animals for ground beef,” Jamie Schweid, executive vice president at burger chain Schweid & Sons, told Quartz. “We want middle meats to be in demand.”
Though it might initially make sense to cut down on the steaks and grind more of each cow into ground beef, the numbers are precarious. In the food-service industry, ground beef accounts for 63 percent of beef sales by volume but only 37 percent of total revenue. In retail sales, it’s 49 percent of volume and 39 percent of sales. An increase in ground beef would cause an even bigger hit to the cattle industry than it’s already taken.
Poultry and lean meats are still a much higher percentage of American meat consumption than red meat. Like any increase in consumption based on lower prices, it’s likely that people will stop eating meat again once prices rise. It’s not a trend so much as a temporary phenomenon.
Meanwhile, total meat consumption is still in free fall. Red meat may temporarily have a larger slice of the pie, but the pie itself continues to shrink.