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For Irish beef farmers, the biggest battle is being able to generate a margin from beef cattle with relatively high production costs alongside serious farmgate price volatility. There is no denying Irish farmers need more from the market – yet the more is returned from the market, the greater the pressure on the product to stay in favour with consumers.
The latest AHDB/Kantar consumption data in the UK show big increases: +8% for the four weeks in November 2016 compared with the same month last year, and 2.5% on a quarterly basis. It is no coincidence that average retail beef price was down from £7.02/kg (€8.35/kg) a year ago to £6.85/kg (€8.15/kg) this November.
Looking at longer-term trends in the UK, there was a decade of sustained growth in consumption from the BSE dip in 1996 through to 2007, a period that coincided with a growing economy and flat beef prices. When the crash came in 2008, the consumption trend line turned down, further driven by the fact that beef prices also began a five-year period of sustained growth, peaking in 2013. The declines in prices since 2013 in the UK and Ireland, its main import supplier, were reflected in modest growth in consumption from 1.1m tonnes in 2013 to 1.15m tonnes in 2014 and 1.18m tonnes in 2015.
In the past 25 years, poultry meat consumption in the UK has almost doubled
Meanwhile consumption of chicken in the UK has grown dramatically, and continues to do so. In the past 25 years, poultry meat consumption in the UK has almost doubled from 1.25m tonnes in 1991 to 2.3m tonnes in 2015. This is double UK beef consumption.
The same trend is observed across the world. Taking the US as an example, beef consumption peaked in the 1970s at around 40kg per person annually, when chicken consumption was in the order of 12kg per person annually. Since then chicken consumption has been on the increase there, while beef has been in decline. By 2013, chicken had replaced beef as America’s meat of choice, with per-capita consumption growing to 26kg per person, while beef had fallen to 25kg per person, according to US Department of Agriculture (USDA) data.
It is clear that in what is described the developed world, beef consumption is in decline. Beef has had a horrendous press over the past quarter century and is perceived as an unhealthy product. Add to this its association with greenhouse gas emissions and there are already plenty of reasons why consumers choose an alternative protein. In the latest weekly AHDB retail price survey, beef fillet retails on average at £35/kg (€41.66/kg), compared with a pork fillet at £9.34/kg (€11.11/kg). Tesco is selling a pack of two chicken breast fillets at £8.34/kg (€9.92/kg). Pork and poultry are a fraction of the cost of beef and, at times of economic recession, this is another reason for them being the protein of choice.
Special occasions
In this environment it is unlikely that beef will ever resume its primary position in the protein market. It is likely that it will become more the meat for special occasions, when consumers are prepared to pay more.
Yet there is potential elsewhere in the world. As Asia, particularly China and Korea, becomes more affluent, potential for beef sales is increasing among the growing middle classes. According to USDA data, consumption in China is 7kg per person, one-third of typical European per-capita consumption. It is a similar or smaller amount in the other huge developing Asian economies such as Vietnam and Indonesia. This presents serious growth potential for red meat in the years ahead. This is why it is so important that Ireland pursues access to these markets as a top priority.
Beef also has to be promoted as a luxury product, expensive relative to other proteins, but still great value at an affordable (not cheapest) price. To do otherwise would not reflect the production values behind a product grown on grazed grass on family farms to the highest welfare and environmental standards.
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