cutting a steak

In this economy

October 3, 2011

Is anybody else getting sick of phrases like, “In this down economy,” or “Since the recession”?

I realize that I’m blessed to live in a state (Nebraska) that’s doing fairly well compared to many in the Union and I work in an industry (agriculture) that has many bright spots compared to others, but at some point don’t we have to quit blaming stuff on “this economy”?
 

That’s why today’s myth is one that really irritates me and I’m glad we’ve got some data to disprove it.

Myth—In this economy people won’t pay more, even if it is a premium product.

Fact—People want value. And it seems they know the difference between buying something cheaper and spending a little more for something that’s a whole lot better.
 
That philosophy carries over to consumer meat purchases. If they’re not going to go out to an award-winning steakhouse, they want that scrumptious steak at home. If they do treat themselves, it better be worth every pretty penny they just paid at that fancy restaurant.

But I’m no psychologist so don’t let me tell you what people are thinking. Instead take a look at some research out of Kansas State University that proves what people are really doing.

It notes that demand is a combination of both price and quantity, and has this to say about CAB:

  • “The demand for CAB has outpaced Choice product since 2002. Demand for CAB increased 56% over the eight years and Choice demand increased 20%.”
  • “The commodity product seemed to be more dramatically affected by negative macroeconomic factors, such as trade barriers and overall economic health. It is also worth noting that demand for Choice product appears slower to rebound during times of recovery than CAB demand.”

This chart illustrates my point.

But the cheery news, that will give you something to feel “up” about in this down economy, is that stronger demand means more money for cattlemen and women who supply the brand.

  • “Improving demand at the consumer and wholesale level can have an equally dramatic, positive influence on farm-level prices and production,and these effects can be illustrated by the success of CAB and the Angus breed.”

That’s backed by numbers: Average CAB premiums in the $5 per hundredweight (cwt.) range,video sale Angus breed premiums of $6.55 and 63% Angus-influence in the 2010 U.S. steer and heifer harvest mix.

See? Blessings abound if you look for them!

May your bottom line be filled with black ink,

~Miranda

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