What is in this article?:
- Cattle price pullback was likely even before LFTB discussion.
- Labeling changes and other ramifications could come from the LFTB discussion.
- Consumer reaction to LFTB will also be relatively short lived.
“I’m still fundamentally bullish on (beef) exports, but when we look at individual weeks, that’s part of the pullback. I’m not going to say we’ve burst the bubble, but we’ve pulled back a bit on that bullishness,” he said.
The economist said oil and gas prices and their forecasts also played a role in consumer demand, but added: “I tend to think that’s a little bit overhyped. Gas still makes up a portion of our individual decision making, but it’s mainly an indirect effect in how it’s embedded in the prices of many things we buy. Add all that up with the LFTB stuff then we have more concern about demand than we did a month ago.”
Consumer reaction to news in recent weeks that lean, finely textured beef is sometimes added to ground beef shocked the trade, Tonsor said.
“Perception is reality. The consumer dollar drives the vast majority of what goes on and people make decisions based on perception. These decisions may or may not be consistent with scientific reality,” he said. “To say ‘it’s beef, stupid’ or ‘it’s always been beef’ may be accurate – and I personally believe that, but I’m not sure it’s sufficient to change perception. You can’t trump perception immediately with science.
“One of the things I’ve found in other studies—such as the impact of media attention to animal welfare issues and meat recalls—is that total (aggregate) beef demand is typically affected for one to two quarters. That’s still multiple weeks or months, but it doesn’t persist for five years,” he said. “I tend to think consumer demand reaction to this story in this context will also be relatively short lived.”