Tuesday, March 03, 2009
Meat-eaters are �trading down� from beef and pork in favor of chicken as consumers pare their food costs, according to the chairman of grocery chain Safeway Inc. and analysts at Deutsche Bank AG.Source. So while real incomes are rising, people may still be substituting to add to savings.
The switch will squeeze beef and pork producers, while chicken sellers may gain from the quest for �cheaper protein,� Deutsche Bank said in its �Monthly Mouthful� report. Still, poultry prices face pressure as rising protectionism and global recession make global trade more competitive, the report said.
�We�re seeing more shifts in the meat category to cheaper meats -- ground beef and chicken -- than we saw earlier in the year,� said Safeway Chairman Steven Burd. There is �a trading down virtually across the board� in retail and even �non- retail� products, he said during the Pleasanton, California- based company�s earnings teleconference on Feb. 26.
The CHART OF THE DAY compares the U.S. wholesale prices of chicken breasts, beef brisket, beef cutout and pork belly futures since Lehman Brothers Holdings Inc. filed for bankruptcy, an event that helped trigger the credit crunch and recession. Notice how pork futures initially rallied as an alternative investment, but have declined along with the more expensive cut of beef.
UPDATE: It's more prevalent than I thought.