How does the retail price of beef compare to pork and chicken? Has the price of beef gone up or down, in real terms, over time? Which country consumes the most beef? Which country consumes the most pork?
I’ve been doing a lot of reading lately about the meat industry, both domestic and international, which led me to ask the previous questions (and many, many more). The answers seemed anticlimactic without pretty pictures so, I took the data I found from all around the interwebs and made some spiffy charts.
Before I present you these charts, I want to introduce two nerdy economics terms I’ll be using: nominal price and real price. Nominal price is just the amount on the price tag. If you went to the store and bought a brisket for $2.07 per pound, the nominal price is $2.07 per pound. Easy. Real price means “inflation adjusted price”. Paying $2.07 today for a brisket would have been like paying $1.28 in 1993. Real price gives us a way to accurately compare prices throughout the decades.
I chose the data in Chart 1 because I wanted to compare the nominal price (the number on the price tag) of beef, pork and chicken over a 22 year period. The immediate take away from this chart is that although all meat has seen an increase in nominal price (to be expected over time), the nominal price of chicken has stayed much more flat. Otherwise, I think anyone who has set foot in a grocery store could tell you that beef costs more than pork, which costs more than chicken.
If you would like to check out the original data, it can be found here.
The first chart showed us that the amount on the price tag of beef went up from 1987 to 2009. But, what about the real price of beef?
In Chart 2, the blue line represents the nominal price (price tag) of choice grade beef. The red line represents the real price (inflation adjusted).
Here’s an example of what this tells us: in 1990 the nominal price of choice beef was $2.81 per pound. That is equivalent to paying $4.94 per pound in 2012. In 1998 the nominal price was $2.79 per pound which is equivalent to paying $3.90 per pound in 2012.
Inflation adjustments were made based on data from Bureau of Labor Statistics CPI Inflation Calculator.
Chart 3 is interesting because it shows that the real price of chicken, unlike beef, showed a fairly significant drop over the 1987 to 2009 period. So, even though the sticker price of chicken has gone up over time, the real price has dropped nearly 20%!
Chart 4 shows beef consumption by six of the top beef consuming countries. Not surprisingly, the United States consumes more beef than any other country in the world. Here is the dataset, if you’d like to see it.
The surprise in this chart is that in 2012, the EU-27 countries actually consumed less beef than Brazil. To put it in perspective, the population of the EU-27 is over 500 million while Brazil’s population is not quite 200 million. That means Europeans consumed, on average, 34.4 pounds of beer per year per person while Brazilians ate 86.5. That’s 2.5 times more!
In fact, Brazilians consumed slightly more meat per capita than Americans (86.4519 to 86.2793, respectively).
Chart 5 shows the retail and wholesale value of cattle, as well as consumption and production (commercial carcass weight) in the United States from 2002 to 2011. Here is the original dataset.
Before I can really draw conclusions from this data, I’d like to see the real prices. I’ll be sure to add that in the future.
Chart 6 is probably one of the most interesting charts on this page. You can clearly see that starting in 1988, the proportion of choice grade beef started to massively decline while select grade increased in a nearly identical manner.
In 1987, choice beef comprised 94.5% of all graded beef while select was a mere 2.2%. That’s nearly 1% less than prime!
Fast forward to 2011 and prime still holds at right around 3.6%, while choice and select are 65.3 and 30.7, respectively. Honestly, it is amazing to see the massive surge in select grade beef in the last 30 years.
Here is the original dataset.
Chart 7 shows six of the largest pork consuming countries in the world. China consumes almost 50% more pork than the other five countries in this chart, combined. Here is the dataset.
Aside from China’s massive pork fetish, you should also note that the United States consumes less pork than beef. Why? Possibly because beef > pork. But I’ll have to study that more.