As the recession discourages people from dining out, the U. S. beef industry is stepping up efforts to sell steaks through supermarkets to compensate for a slowdown in restaurant business, NCBA economist Gregg Doud said March 16.
“On the steak side, you are seeing a lot of features for rib-eyes and T-bones at below $5 a pound. That is some of the best featuring we have seen in many, many years,” said Doud.
The NCBA is the nation’s largest cattle industry trade group, and Doud said the feedyard segment of the industry, which fattens cattle on grain, has lost about $4 billion in equity over the last 15 months.
The losses are due in part to high grain costs and a slowdown in beef sales in restaurants and export markets, which have prevented cattle producers from getting the prices they need to cover costs.
In years past, about half of the U. S. beef has been consumed at restaurants and fast-food chains. But business is down in that segment as cost-conscious consumers eat at home.
Current beef prices are “not profitable” for the long term but are necessary to sell beef, said Doud.
The losses on cattle have led to producers raising fewer cattle, which could mean less beef in 2010 and beyond.