In this file:
· Canada: Price may pressure beef consumption
· When Brazilians Can’t Afford Steak, Peak Beef Is Nearing
Price may pressure beef consumption
By Barb Glen, The Western Producer (Canada)
June 25, 2020
Canadian beef consumption per capita has been gradually declining for the past decade and economic effects of the pandemic might further pressure consumer purchases, an agricultural economist suggests.
Craig Klemmer, principal ag economist with Farm Credit Canada, said the price of beef could become an issue due to high unemployment and escalating credit card debt. However, Canadian beef is a strong brand, which may help the industry ride out those effects.
“Although beef consumption has been declining from 2010 through 2015-16 … what we do see is that if you strip out the impacts of price … beef remains a strongly demanded product in Canada. It is one of the proteins of choice, arguably ‘the’ product of choice,” Klemmer told a recent webinar organized by the Canadian Round Table for Sustainable Beef.
The labour market is weakening in all sectors during the pandemic. The Canadian unemployment rate was 13.7 percent in May and higher in Alberta at 15.5 percent.
Those rates are significant given that every type of farm, regardless of size, extracts at least a portion of income from off-farm sources. If jobs are scarce, it could bring further financial challenges, said Klemmer.
He advised beef producers to consider what high credit card debt and economic strain might mean for their product. So far, he said statistics show beef is trending well against other meats.
“People continue to choose beef and I think that’s a really good news story,” he said, considering the country’s aging population and the different dietary habits of an increased immigrant population.
“Canada has done such an incredible job of establishing (beef) as a strong brand.”
The last three months have shown increased consumer interest in buying local when it comes to food but it is unclear how that will play out in terms of beef purchase. However, Klemmer said there is a clear preference for Canadian product...
When Brazilians Can’t Afford Steak, Peak Beef Is Nearing
The economic damage from Covid-19 is revealing the limits to cattle expansion and consumption.
By David Fickling, Bloomberg Opinion
June 25, 2020
For a sign of how much the coronavirus is upending economies across the globe, try this for size: Even Brazilians are finding it hard to afford their daily ration of beef.
With 1.1 million people sick from Covid-19 compounding the problems of an economy that’s seen unemployment in double digits for four years, consumption of beef is likely to fall 10% this year, Fabiana Batista and Tatiana Freitas of Bloomberg News reported this week.
That could be a disturbing sign of how a country once seen as a winner of the last era of globalization is falling behind. On the other hand, it might be a promising indicator that a feared boom in the global cattle industry — which already accounts for more emissions than the world’s car fleet — isn’t about to wreck the planet.
As we’ve argued, it’s not impossible that we’re already approaching peak beef. Consumption growth over the past decade has fallen to the lowest levels since the mad cow disease era of the 1990s, and in many countries that traditionally revere red meat such as the U.S., Australia and Argentina, it’s actually in decline.
The reasons aren’t hard to discern. Quite apart from health issues, beef production requires an unusual amount of land, feed and water — one reason that it’s by far the most expensive regularly consumed form of meat. About half the world’s 5 billion hectares of agricultural land is already used to graze and feed cattle (and, to far a lesser extent, sheep). That means there’s limited remaining capacity on the planet to raise more beef — one reason that consumption has grown so much more slowly in recent decades than for smaller, faster-growing livestock, such as pigs and chickens.
While coronavirus is clearly taking its toll in Brazil, that long-term trend is the best explanation for what’s happening at the moment. Brazil’s beef prices have been rising faster than the rate of inflation for decades in local-currency terms, as rising incomes and an increasing appetite for red meat in Asia have reoriented the industry around exports rather than domestic supply.
The shift is likely to be particularly acute at present. Thanks to the devastation wreaked by African swine fever to China’s pig herd last year, the country’s diners are in the market for alternative sources of protein. On top of that, per-capita gross domestic product, which was less than half of Brazil’s a decade ago, has now pulled into the lead.
In a world where a finite supply of beef will be bought by those most able to afford it, China’s 1.4 billion diners on average now each have more money to spend on red meat than Brazil’s 210 million. That effect is likely to play out elsewhere:
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