Exploding interest in “meatless Mondays” and plant-based foods on restaurant menus and at grocery stores suggest trouble for the beef industry. But, for now, that’s only in the United States.
Elsewhere, beef is surging in popularity and global demand for the meat is looking broader than ever, which is good news for Minnesota’s food companies and ranchers.
“Beef consumption globally has increased,” said Pat Binger, head of international exports for Cargill, the Minnetonka-based agriculture giant that is one of the world’s top processors of beef.
“Really, it’s about people moving into the middle class,” he said. “There’s more money in more pockets and, historically, we have seen a correlation between incomes going up and protein consumption levels going up.”
A new report from Grand View Research shows those rates continuing to rise, led by China. The global beef market is expected to grow 20% over the next six years to surpass $383 billion, the firm forecasts.
Cattle raised for slaughter require more land and water than for many other types of food, and many groups worry about the toll higher global beef consumption could have on the environment.
“If the global population is going to grow to about 10 billion by 2050, we have to ask ourselves what are the resource implications under business-as-usual growth rates and what kind of things do we need to consider for how we use our resources,” said Richard Waite, a research associate for the World Resources Institute’s food program.
China ‘the game-changer’
Cargill sees burgeoning opportunities in Southeast Asia, Latin America and — farther in the future — Africa and the Middle East. But beef consumption in those areas, while growing, is dwarfed by that of places like Japan, South Korea, Hong Kong and Mexico. “We are seeing pockets of emerging markets like Vietnam, the Philippines, Colombia and Peru, but we are still very reliant on some of those larger, industrialized, aging countries,” Binger said.
Cargill is optimistic in the near term about countries like Japan, with a younger generation eating less seafood and adopting a more meat-centric, Western-style diet. But Binger said the company is less confident about the 10- to 20-year period because Japan’s aging populace isn’t being replaced by adequate immigration or birthrates.
The real driver for global beef growth is China.
“China has been, far and away, one of the biggest drivers for global beef,” he said. “Without China, global beef consumption has been relatively flat. And I think it will continue to be the game-changer.”
Pork is the meat that defines the Chinese diet. The average Chinese resident eats just 13.5 pounds of beef in a year, which is about a pound below the world’s average. But that figure is up from about 10.1 pounds a decade ago, according to the U.S. Meat Export Federation.
“When you have a population of 1.4 billion and you move consumption up one pound per person, you increase that [total consumption] very, very quickly,” Binger said.
The U.S. and China don’t have a trade agreement that would allow Cargill direct access to China. But, Binger said, the company delivers a lot of beef to Hong Kong and “it’s common that beef in Hong Kong will flow into China.”
Consumer behavior varies across the globe, with some patterns that cross borders. But, Binger said, the growing concern among U.S. consumers over animal welfare is not something that resonates in many other parts of the world. By being a major seller both domestically and internationally, Cargill is able to export parts of the carcass — like the tongue — to countries that will pay a higher price for cuts that Americans wouldn’t buy.
Beef alternatives rise in U.S.
Here in the U.S., grocery stores are bursting with new plant-based alternatives, from yogurts to burgers to coffee creamers, answering a growing cultural desire to eat more foods that come from plants. Many consumers are blending these alternatives into their diets, but not converting to a pure vegan or vegetarian lifestyle.
“There are growing concerns around animal welfare and the environment and what [animal] agriculture brings to it,” said Darren Seifer, food consumption analyst for the NPD Group. “Younger people are a little more attuned and that will bring headwinds in the future for the industry.”
U.S. Department of Agriculture data show annual per capita beef consumption in steady decline since 1976 when it peaked at 94 pounds a year. Still, Americans today eat an average 57 pounds of beef per year, trailing only Argentina and Paraguay, according to the Organization for Economic Cooperation and Development.
Even as individual consumption levels have decreased in the U.S. over time, population growth and exports have helped keep U.S. beef production relatively steady in recent decades.
Many nutritional studies, including a recent one published in the medical journal the Lancet, recommend that people who eat a lot of red meat should eat less of it. On the other hand, dieting trends, like the recent popularity of the ketogenic diet that advises eating a lot of fats, only help the meat industry.
Methane emissions, water use and traceability are the big consumer concerns that Cargill sees challenging the U.S. beef market.
“The environmental concerns are understood and we have taken a lot of very strong actions to improve the way the industry does its work,” said Jon Nash, Cargill’s head of North American protein. “There’s a lot of things we are doing just to prepare for the future.”
Right now, he said, the company is optimistic about beef’s outlook because the economy is strong. Raising cattle for slaughter takes longer than it does for other livestock, which makes it a more expensive meat.
Affordability is always an issue and several other meats, led by chicken, cost less. An economic downturn, or drought that reduces cattle herds, could push more U.S. consumers away from beef.
Waite, of the World Resources Institute, says the future of beef shouldn’t be oversimplified; it’s about global resources and a fair distribution of nutrition. People in developing regions will aspire to eat more meat as their incomes grow, he said, “and it will probably be good for them from a nutritional standpoint. I’m not going to sit here and tell people in those regions not to eat more meat. Just from an equity standpoint, that doesn’t seem right.”
Instead, he argues, people in the U.S., Canada, parts of South America and Europe should be eating less beef, “so people in other areas could eat more. It’s a resource distribution issue.”