Beef consumption in the U.S. actually rose during the pandemic because it was propped up by government stimulus spending, according to a new report from Rabobank.
The report, “U.S. Beef Demand: The Risk of Recovery,” notes that both prices and demand for fresh beef spiked last spring. It said this could only partially be explained by interruptions in the beef supply chain caused by the pandemic – interruptions that were, in any case, quickly resolved.
The report noted that, for a brief time last spring, U.S. per-capita GDP declined during the pandemic while disposable income actually increased – a situation it attributed to the government’s first round of stimulus checks and other payments like Social Security and unemployment. That extra money combined with changes in consumer behavior caused by the pandemic to push up demand.
“The extreme nature of the pandemic may have overridden the stickiness in beef demand as consumers quickly adjusted typical short-run constraints/habits (e.g. on-hand inventory, nutrition focus, cooking knowledge, and/or time at home to focus on meals) to sharply increase retail beef demand,” the report states.
The report predicts that post-pandemic beef purchasing will depend on the size and timing of any future government stimulus.
“Timing is everything. If meaningful government fiscal stimulus expires before the economy fully recovers, which seems highly likely, per-capita personal income will likely fall below both pandemic and pre-pandemic levels,” likely leading to reduced beef consumption, the report states.
