Cheaper meats make inroads on beef in North America

Press, 18 July 1980, Page 14

Cheaper meats make inroads on beef in North America

Beef has Idst a lot of ground in North America to alternative cheaper meats " — in particular 1 pork -and poultry —’ according to a Christchurch meat exporter, Mr J. W. Hartnell, who has recently been in the • United States, Canada, Honolulu and the Caribbean. But in the short term he expects prices for beef to 1 remain reasonably firm and next year demand I may improve. ■ The decline in con- ' sumption, he says, has been occurring in the three main areas in which beef is used — in the manufacture of frankfurter sausages, in the making of hamburgers or patties and in the sale of ground beef through chain stores or supermarkets. ■ . From his inquiries Mr Hartnell -thinks that in the j: last year beef consumption '' in North /America could have-declined by about 31b , per head, " but this (has been more than offset by a rise in consumption of pork by as much as 51b per head and of chicken by up to 31b. It has been a matter of price. He says that chicken and pork had ; never been seen so cheap : for so long. i The manufacturers were able to adjust .their blends according to' the price of raw. materials. When he

was in Canada he had . visited a large frankfurter sausage manufacturer who had changed his blend from being mainly of beef to mainly pork. Pork trimmings were being delivered to his factory for 80c per . lb when at the same time the equivalent price for • boneless cow beef was sl.2o’per lb.

There was a similar story with . ground beef in supermarkets. In Toronto one supermarket had ground beef offering as a special at $1.38 per lb. Another, which did not have it as a special, was selling it at $1.70 per lb, whereas in the same store whole chicken was 65c per lb, whole lurkey at 75c, pork hocks which did not nave very much meat on them at 35c per lb and pork butts’at 75c. Chicken, turkey and pork were all cheaper than the cheapest sort of beef, and a sirloin steak at the other end of the spectrum was worth about £7 per lb in Toronto. And in the area of hamburger or pattie manufacture, Mr Hartnell said that whereas the price for hamburgers had remained fairly static in the last few months the demand from fast food outlets had been for cheaper chicken and pork. ' How long will this position last? Mr Hartnell says that pork production will remain at about present levels until about the end of the year, but a hopeful sign for beef had been that there had been a slowing in the number of broilers coming forward. Thus while on the faceof it no substantial lift in beef prices could be . expected for- the rest of the year, in the last few weeks there had indeed been a substantial rise ’in h the market for boneless v . cow beef of about 20c per lb. This was believed to have been inspired by speculation and was associated with beef stocks' having declined and exports from the. main suppliers currently ',. running at up to 30'per cent-... behind last year. But most, people were fairly cautious about ; the situ- ,

ation and there was a preparedness to sell at the better levels by stock holders. But- Mr Hartnell does not see pork production maintaining present levels indefinitely, particularly when producers have been losing money heavily at recent prices, so he sees at least some rosier times ahead for beef. His summation of the situation is . that beef prices should remain reasonably firm in the short term because of a genuine shortage of the commodity, with stocks in store in the United States being low, domestic . production • having recentv been disappointing and also Australian exports at present about 30 per cent, behind last season’s tonnage.;-' ■

• > /If, as well, pork production declined in 1981 and broiler - chicken numbers coming forward continued downwards, ■ demand for beef should improve, pro- . viding of course that : any recessionary effects were not too damaging. Mr Hartnell raised another issue. Under present quota' entitlements he said that more than 90 per cent. of New Zealand’s beef output was going to North America. In times when New Zealand had reasonable quantities of beef to dispose of outside ..North America, , a lot of • companies ?had worked hard to find outlets in small but nonetheless important markets, and now the situation had arisen where the supply was not sufficient to maintain continuity of trade in these areas, and this was especially true of the Caribbean. Now no bulk beef like boneless cow and trimm- ■ ings was going there at .all it was ftotijv-j Australia.' In the ‘last two years New Zealand ,had lost con- . siderable ground in these areas and markets, that New Zealand had been instrumental in. developing were buying from Australia, which had more';: beef to sell. '' xNew Zealand .companies .with no direct connections with thqsg-i areas took the .

attitude that they should sell on the market which offered the highest prices, . but the Australians believed it was worthwhile continuing to foster these outside markets . and they. ' were selling at much lower prices. Mr Hartnell said that about the mid-1980s Aus- ; tralian and New Zealand beef production might peak again and if that should coincide with the top of the build-up of the herd in the United States then New Zealand’s export entitlement to the United States under the new counter cyclical formula would decline and diversified ■ markets, although returning lower prices would be' needed again. (The. question was whether 'New Zealand could expect them to be prepared to take its beef again. , > Mr Hartnell said .that Australia was also sending lamb into the Caribbean and he had been surprised to find how much'-the quality of it had ; improved, and he saw Australia’s rising lamb '.production possibly posing more of a threat to New ; 'Zealand - than it had /.done in the-’phst. 1 In: the islands of MartiniqUey.,< and Guadeloupe where New Zealand -had established a good lamb market it was now suddenly faced by a 20, per cent, freight rise all at: the one time, Mr Hartriell Said. In the short term at least this also might open up an opportunity for Australia.