Big test for Prime beef demand
By Scott Brown, Delta Farm Press
One of the most positive factors for beef and cattle prices in recent years has been the growing consumer preference for higher-quality beef. Although offered at a pricing point above most other meat options, purchasers have been willing to pay up for prime and upper-choice product.
Comparing USDA data for the quantity and price of beef loads from fed steer and heifer beef at the wholesale level shows that in 2019, the combined value of Select and ungraded beef was more than $3 billion less than in 2015, a decline of 19%.
The values for Choice or branded beef increased by nearly $1.25 billion, a gain of 9%. Meanwhile, the value of Prime beef increased by just over $520 million, accounting for a jump of 101%.
More quality beef on the market
Although availability of Prime beef has steadily increased over time, the growth was relatively slow before 2020. This year saw a notable jump in steers and heifers receiving a Prime grade, in part because of more time on feed and heavier slaughter weights due to processing disruptions this spring.
While supplies are up, many consumers are facing more economic uncertainty. Moving forward, it will be a challenge for these additional higher-quality supplies to receive the same premium prices that were the case for the past decade.
The amount of beef grading Prime remained very stable and near 3% from 2000 to 2012, but then increases started. From 2012 to 2019, increases averaged 0.77% per year, reaching 8.9% in 2019.