Consumer preference battlefront: pork vs. poultry - Commodities

This decade has shown some profound changes in eating habits of the American consumer. The first change that comes to mind is, of course, the growing consumer preference for poultry over the traditional American fare of red meat. But there are more profound changes coming, even within the subcategory of pork vs. poultry.

There has been a traditional rule of thumb concerning the substitutionality of pork and chicken products. The American consumer was seen as buying the beef products first, and with the remaining of the household meat budget to be allocated between chicken and pork, predominately, based upon price preferences.

As a result, the rule was that dressed broiler prices were never 80% less than live hog prices. The evidence since 1983 has shown a much weaker link. Consumers are making that allocation based on preference more than price.

In 1982, poultry consumption, which includes both chicken and turkey, surpassed pork consumption for the first time. In that year, poultry as a category broke the barrier, with consumption levels of 63.8 lb. per person, against pork at the 59 level. From that point on, turkey and chicken have continually remained ahead of pork in consumer preference as voted by their yearly consumption.

Three years later, the U.S.D.A. is predicting that 1985 may be the year that chicken consumption, taken alone as a subgroup of poultry, may surpass the consumption of pork. Analysts are predicting 1985 will place per capita chicken consumption at 59.1 lb. and pork consumption trimmed to 58.6 lb.

Pork consumption had been falling due to the same consumer health concerns that have influenced red meat consumption in the United States. Industry agents of the pork producers have tried to counter the defection, but to little success. Drive through the Midwest and you'll see pork production sitting idle, caused by both consumer preference and the difficulty of catching the highs and lows of the pork marketing cycle.

In 1980, pork consumption reached a peak of 68.3 lb. per person, but has been falling steadily ever since. The predicted pork consumption of 58.6 lb. for 1985 is 4.6% less than in 1984, and over 14% below the 1980 high.

During this same time, frame broiler consumption has been rising at a healthy level for the broiler producers. Broiler consumption is predicted to be 55.9 lb. per capita in 1985 compared to 52.8 lb. in 1984, and a mere 47 lb. per capita during that high year for pork, 1980.

Turkey, the other component of the poultry category, has experienced slower growth. As processed turkey products enter more and more grocery baskets on a regular basis, per capita consumption has also improved. In 1984, turkey comprised 11 lb. against a projected growth of 11.5 lb. in 1985.

In conclusion, what we are seeing is that traditional relationships can no longer in all cases be counted on to set prices in the marketplace. More and more often prices today are set by consumer preference in our relative affluent time rather than being set by the traditional rule of substitutionality born in times of single income producing households and last seen in times of high inflation.

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