Money Matters- Pork Market
One of the greatest frustrations I have is looking at prices in the meat counter. We’ve all seen the extremely high beef prices and wonder why pork hasn’t made a run on demand relative to value compared to beef. I was recently talking to a producer and his thought was if we have consumption of 50 pounds of pork per-capita at a retail value of $4 per pound, each individual in the U.S. could buy all their pork for $200 today. This is a real value relative to beef and a great buy for families trying to offset inflated food prices. In comparison, the cutout value for beef as of mid-April was 3.85 times higher than the pork cutout price. At this price, it would take $800 to buy a similar amount of beef per person. For a family of four, pork has a $2,400 advantage annually. What a great way to help fight food inflation! With the quality and taste of pork today along with the price advantage, as an industry we need to use the advantages pork provides to increase demand.
One area where pork needs to continue to be positioned is in food service. Looking at total food expenditures (illustrated below) the annual consumer spends more of their food budget outside of the house rather than making meals at home. Outside of 2019 and the impact of most restaurants being closed during COVID-19, it appears this trend will continue. Going forward, one thing is for certain: the average consumer will be spending more money for ease of preparation and convenience on meals in order to spend more time with their families.
As an industry how do we evolve to capture more market share and to be considered as the protein of choice for families in the future?
For starters, producers through the National Pork Board with promotional dollars and packers need to continue to develop markets in the U.S. as well as abroad with an expanded product offering. With consumer preferences changing we can no longer be content on selling whole loins at retail outlets. The average consumer doesn’t know what to do with a 17-22 pound pork loin and this won’t change. Recently, I was in a large retail outlet store and watched a woman pick up a whole loin. I could tell she liked the price because I could see her looking at the label and comparing it to beef. After putting it into her cart, she paused and put it back. My intuition told me she simply didn’t know what to do with a whole pork loin. As an industry, we need to keep developing product offerings that are easy to prepare, of high quality, nutritious and taste great. This will attract new consumers as well as expand the base consumer of our products today.
This marketing role doesn’t only reside with the National Pork Board and packers. Producers will need to also help market by positioning their pork as the protein of choice. Sustainability will continue to drive buying decisions by consumers, and producers will be responsible to make sure they can supply their information to end users that show the advantage of pork over beef. The data already exists on a small scale.
Producers, regardless if they own the pigs or are a grower, need to work together to provide a sustainability score to end users to promote their product. Most producers already have the data, and with current production methods and genetic improvements the average pork producer has strived to be more sustainable before it was a buzz word. It is time to start sharing the improvements you have made to your operations and start promoting your product. We already have the data and story, but we need to tell that story along with continuing to develop product offerings.
For more insights from Steve and the Swine Team, visit Compeer.com