With Economy Humming, Americans Grilling More Steaks for Labor Day

When Americans feel like they’ve got more money, they like to treat themselves. That means there could be plenty of steaks on the grill this year for Labor Day.

A buzzing economy and low U.S. unemployment is a boon for beef, typically considered a premium meat. Gains for the cattle herd means retail prices have fallen. Combine that with grocer discounts for the holiday, and steaks and burgers could be the cheapest they’ve been in years, attracting demand.

Meanwhile, other meats are in the doldrums. There are record supplies of chicken and pork in the U.S., and even with prices at multiyear lows, it’s more than most people care to eat. Companies including Tyson Foods Inc. and Sanderson Farms Inc. have recently said that bargains on beef were hurting poultry.

“Margins for retailers are great, and consumers are back into beef now that prices are better,” said Will Sawyer, an economist at Greenwood Village, Colorado-based CoBank. “Chicken, which had been the recession special for so long, is having to take a back seat to the more pricey protein.”

Americans are hungry for burgers and steaks partly because they’ve been deprived. A drought caused ranchers to reduce herds to a six-decade low in 2014, and beef prices shot up to an all-time high. The meat was so expensive it forced consumers to cut back, with consumption declining to the lowest since the 1970s. Now, even with cheaper prices and bigger supplies, demand still hasn’t bounced back to where it was before the recession, Sawyer said. That means there’s still plenty of room for increased buying.

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SOURCE: BloombergQuint