Looming beef shortage could be boon for seafood industry
Widespread droughts in 2022 resulted in a looming shortage to the beef supply, and could leave billions of consumer dollars looking for a different protein to purchase.
Speaking during the National Fisheries Institute’s Global Seafood Market Conference (GSMC), running from 15 to 19 January in Palm Springs, California, U.S.A., Performance Food Group President of Protein Brands Steve Sands showcased how beef has heavily outperformed all other proteins. According to USDA data, U.S. consumers expenditures for beef has been greater than pork and chicken combined.
In 2022 alone, U.S. consumers spent over USD 91 billion (EUR 83.7 billion) on beef, that data indicates.
One of the key pieces of that increase in expenditures, Sands said, is that spending on beef hasn’t been hit by price increases.
“Beef has continued to become more and more expensive.” Sands said. “Even though beef is by far your most expensive protein, it is not slowing down people’s consumption.”
The reason for that, he said, is that beef is far ahead of the other proteins on branding and “telling a story.”
However, beef is also facing some problems. Severe droughts in the Southwest U.S. and upper Midwest U.S. have forced many ranchers in the cattle industry to kill off their herds, flooding the market with beef in the short-term but setting up a shortage in the long-term. A key statistic, Sands said, is that ranchers are killing a lot of female cattle that would normally be used to breed more calves.
“We’re killing more cattle in this country than we’ve killed in the last 20 years,” Sands said.
With lead times much longer than those of poultry or pork, that means a shortage of beef is on the horizon.
“Those animals that should be having babies next march, they’re not there, they’ve already been harvested,” Sands said. “What’s that going to set up is a real shortage of beef. This could become quite severe in our industry.”
The USDA is predicting a 5 percent drop in output, accelerating to a 9 percent drop by Q3 and Q4. That means other proteins on the market could be able to fill the void left by a shortage of beef, Sands said.
“This is going to be a real opportunity for competing proteins to try and grab some of that market share,” he said. “Beef is the one that commands that dollar, so it’s a great chance to grab that market share.”
Photo by Chris Chase/SeafoodSource