So what is the "dominant" meat in the U.S. marketplace? That probably depends on how you want to define dominant. Perspective is such an important issue in so many things, isn't it?

In terms of per capita disappearance/consumption on a boneless equivalent basis, beef still maintains a narrow lead over chicken in the United States (See Figure 1). That lead actually grew slightly in 2006, and is forecast by the Livestock Marketing Information Center in Denver to remain the same in 2007.

The trend for beef is flat while the trend for retail weight chicken production, though it declined last year and may do so this year, is still up. Note that retail weight pork consumption has changed little for the past 20 years, meaning that pork industry growth has been completely dependent upon population growth and exports.

Boneless equivalent is probably our best measure of what people actually eat since it leaves out much of the "waste" that we see in meat products. The figure is still based on the residual of production plus imports plus inventory change over the amount we export, since no ongoing public data exists that reflects direct measurement of consumption. In addition, this figure (and retail weight, for that matter) is based on rather old factors that convert carcass weight production to downstream weights based on standard cutting methods, trim loss, pet food usage, etc. The U.S. Department of Agriculture is presently revising those conversion factors.

Chicken Wins on Volume Purchased

If we measure importance in terms of the volume of product that people actually purchase (See Figure 2), chicken is the clear winner with per capita retail weight consumption over 20 lb. higher than beef and nearly 30 lb. higher than pork. The same trends are evident here that are evident in the boneless equivalent chart since they are related by a constant conversion factor.

The argument can clearly be made that either of these "consumption" measures is really just a matter of production since "consumption" here is just what is left over after we deduct the things we actually measure (imports, exports and frozen stocks). And year-to-year variation in "consumption" is indeed a matter of production variation. The kicker, of course, is what price a given level of production/disappearance/consumption results in and the concurrent value of total disappearance/consumption.

Beef Rules Expenditures

Figure 3 shows total retail level expenditures (price times quantity) for the four major species through 2006. By this measure, beef is still the "ten ton gorilla" of the meat sector. Pork maintained a narrow lead over chicken for many years before chicken took over second place in 2004. Pork expenditures moved back ahead of chicken in 2006 as chicken prices fell dramatically and pork prices declined by a smaller amount.

The Case for Chicken

While important, none of these charts provides a complete answer about which is the "dominant" meat if, in fact, there is one. Len Steiner of Steiner Consulting Group makes a compelling argument that chicken has become the leader of the meat business. Its huge presence in virtually every level of foodservice usage and its many product forms in retail stores make it ubiquitous. In addition, its position as the lowest-cost meat protein always makes it a good option for tight budgets and the ability of the industry to respond quickly to prices (such as is the case at present), and price pain leaves it in a terrific position to capitalize on opportunities and, with some discipline, limit the duration of losses.

Experiences with Price Pain

The industry has not historically responded very well to price pain, at least partially because it doesn't have much painful price experience. The merger of Tyson and IBP, however, has brought a degree of red meat margin management to the chicken industry, and probably means that the industry will respond more quickly to low prices than it has in the past. When your business always grows by 4%/year, market share is a pretty simple way to measure success. Slower growth, though, amplifies the importance of margins and will likely result in more response to them. Last year is one instance of chicken's new-found margin sensitivity, and this year may be the first measure of its responsiveness to regained margins.