Lower Meat Consumption Predicted

February 23, 2007 - The U.S. Department of Agriculture projects that annual per capita consumption of meat and poultry will fall from 223 pounds in 2007 to a low of 213 pounds in 2012.

In its report, the agency cited production adjustments due to higher feed costs caused by ethanol production and gains in respective imports. Growth will resume after the low in 2012, but, at about 219 pounds in 2016, consumption will remain lower than in recent years.

Per capita beef consumption declines through the first half of the projection period reflecting lower production due to drought in 2006 and adjustments in the industry to higher feed costs and reduced returns. Use of distillers grains in cattle rations and reductions in corn prices later in the projections lead to production gains and increases in per capita beef consumption in 2013-2016.

Strong demand for consistent, high-quality beef continues in the domestic hotel and restaurant market, and increasingly in the retail market. Beef export markets are also primarily for high-quality beef. An important development will be how beef quality is affected by the increased use of distillers grains in beef cattle rations.

Higher feed costs lead to reductions in pork production, which combine with rising pork exports to push per capita pork consumption down through 2011. A gradual rebound in per capita pork consumption occurs over the remainder of the projection period.

Poultry prices remain lower than red meat prices. However, as returns are squeezed, production gains slow and per capita consumption declines for several years. Following these adjustments, production strengthens and per capita poultry consumption resumes growth later in the projections.

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