At the beginning of a year or maybe the end of one, I think it is always good to reflect on what happened, try to figure out why, and then try to prognosticate what the future might look like.

By reviewing last year, discounting the COVID anomalies, we can shed some light on what our industry may look like throughout the ensuing year.

So here goes, and I know that many (if not most) of you will each have your own thoughts on what happened and why and what we should do, but hold those thoughts for a few minutes and tell us via your comments after you peruse the information below.

My perfunctory industry research reveals interesting trends in slaughter rates by species and consumer takeaway as well as some market forecasting information. Our government publishes more information on what has happened in our industry than is humanly possible to consume, but it does provide some insight. In fact, it may dispel some myths held by our detractors, supporters and those who toil to make it all happen within this extraordinarily complex system of turning live animals into edible protein.

I think an accurate reflective review is to look at demand indices rather than just per capita consumption for each protein, as such an index considers pricing as well as pounds sold.

First, let’s review 2020 statistics for the three main proteins — beef, pork and chicken — by looking at weekly slaughter, weekly demand indices with January 1988 as the base year, change in that demand (Source: KSU meat demand indices, January 2021) and the future of those proteins (Source: USDA ERS market outlook, January 2021).

Weekly slaughter:

Young chicken — For the first three months of 2020, weekly slaughter was rocking along at 10 million to 15 million birds per week more than in 2019. And then came March and slaughter dipped from an average of 170 million birds/week down to a low of 150 million. By May it had recovered almost to 2019 levels.
Cattle — Cattle were steadily 30,000 to 40,000 head per week above 2019. But then along came COVID and it dropped to a low of 440,000 per week from an average of 640,000. Cattle took a little longer than chicken to recover to pre-COVID levels and then remained slightly below them at 650,000 per week.
Hogs — Like cattle, hogs took a similar beating from the onset of COVID but recovered nicely, reaching heights above 2019 and averaging about 2.6 million hogs per week compared to roughly 2.4 million in 2019.

Historical domestic demand indices:

Retail chicken — The indices reflect growth from the 1988 base of 100 into the 120s by 1992 and on up to the 150s by 2005 through 2020. Certainly, there were a few down years but the upward trend is undeniable.
All fresh retail beef — Except for June and August 1988, the beef index has remained below the base of 100 for each month since 1988. It hovered in the low 90s to high 80s until 2008 when it started to dip into the 70s. It climbed back into the 80s around 2015 and remaining there through 2020.
Retail pork — The indices for 1988 thru 2020 are relatively flat, seldom falling below the 90s nor rising above 102.

Market outlook:

Per capita consumption for 2021, on a retail weight basis, beef is forecasted to decrease from 59 to 58 pounds, pork to remain steady at 52 pounds and broilers steady at 96 pounds.

Anne-Marie Roerink of 210 Analytics LLC reported in Meatingplace a shift in consumer purchase habits due primarily to COVID. Retail meat departments closed out 2020 at 8.4% above 2019 levels, which meant an additional $12.7 billion in meat department sales during the pandemic. This trend continued into 2021 with January meat department sales up 15.5% over 2020.

Can this phenomenal growth continue for the rest of 2021 and beyond? Yes, for retail, as restaurants slowly open and the pandemic dissipates. After that, unless we make some dramatic meat marketing moves, retail takeaway will go right back to pre-COVID levels and may drop as plant-based proteins continue to make inroads. Chicken’s upward trend will not abate, however.

So, I ask you, what are we going to do now?

2020 reflections, 2021 predictions

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