KNOXVILLE, Tenn. (RFD-TV) — Beef demand is proving resilient, holding strong even as retail prices hit record highs. With ongoing struggles in the broader farm economy, analysts say this trend is “remarkable,” pointing out that economic pressures have yet to slow consumer demand — at least for now.
Dr. Charles Martinez, Assistant Professor of Ag and Resource Economics at the University of Tennessee, described the situation as one to watch closely rather than panic over.
“I think it’s more of something to watch. " Dr. Martinez said. “You know, if we think about a traffic stoplight, we have green for go, red for stop, and a yellow for caution. I would put us currently in the yellow bucket in terms of whether there’s not necessarily a strong concern, which I would consider a red light. But, it’s more of something to watch, depending upon what industry you’re talking about, what segment of the economy you’re talking about.”
Dr. Martinez noted that beef demand could be influencing other economic sectors, as consumers adjust spending habits to prioritize higher-priced beef products.
“Beef in particular, I think right now — all market signals are showing [that] yes, prices are up, but demand is up, which is a good thing,” Martinez explained. “So that also indicates that we still have some ceiling to go in terms of demand. But the question is, how do they buy that product? Is it going to be with credit, and continue to drive up credit debt? Or is it going to be other forms in terms of their actual income? So, no real concerns right now, but definitely something to watch.”
The robust demand comes despite a 10-percent year-over-year decline in red meat production in August, highlighting the surprising strength of consumer appetite for beef even as supplies tighten.
For now, Martinez says the market still shows “ceiling to grow” in demand, though he advises the industry to keep a close eye on broader economic trends that could eventually affect purchasing power.
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