Last year, the average American ate 54 lbs. of beef, 1.6 lbs. more than in 2015. No, that doesn’t seem like that much—heck it’s only 1/1000 the weight of a single beef cow. But now consider that beef consumption had decreased every year for the past decade, is down 15%-19% since 2005, and that writers have been serving up think pieces on red meat’s demise seemingly everyday since. Now you understand why the slight increase—akin to six McDonalds quarter-pounders per person, per year—has meat producers banging more cowbell.
Indeed, according to one Tyson spokesman, “It’s a great time to be in the protein business.”
While the increase owes to several factors, including changing perceptions of health, lower commodity costs (particularly oil and corn), and shifts in food culture like the rise of “better burger” establishments, it is the ascendance of grass-fed beef that got us really curious. So follow us down a food market research rabbit hole (rabbits love cow pastures…) as we outline the booms and potential busts of grass fed beef.
Grass fed beef has really taken seed and sprouted up. In 1998, sales were around $5 million. In 2013, they were $400 million. Though only 2% of overall beef sales, they’ve increased by over 50% since then. Much of this has to do with an increase in their mainstream availability: Walmarts are everywhere, and sell frozen, grass-fed organic beef for $5.85. So access, both in terms of location and affordability has increased.
But why the increased demand in the first place? There are a few trends at play. First, as health-conscious consumers have looked to minimize industrial processing in their food, they have embraced grass fed beef as a more natural product, more closely related to how cows ate before the advent of modern farming. And there is some science backing this up, though perhaps not as fervently as proponents believe.
Second, there is also a general perception that, in not drastically transforming the landscape and not growing animal feed, the process is more environmentally friendly. As we look for means other than industrial agriculture to feed an exponentially expanding world population, forage feeding makes a compelling case, so many an environmentalist (those who aren’t vegetarian at least) favor the product over its conventional counterpart.
And finally, there is an elevated status associated with “natural” products in general, whether it be cage free eggs or corn syrup free sodas. These premium products (or, as Vencatesh Roa terms it, “premium mediocre”) can class up a menu, impress dinner guests, and give people a generally smug self-satisfaction. Indeed, according to one meat producer, “When consumers see ‘grass fed’ on the menu, they know we’re going out of our way on quality ingredients. Folks are willing to pay a premium price for better quality.”
And pay they do. One shopper, interviewed by the WallStreet Journal, expressed a no doubt typical perspective: "I don’t mind paying a little bit extra because it means more for my health.” Depending on one’s perspective, it might not just be a “little bit extra”—grass-fed beef costs, on average, between 50% and 80% more than its conventional counterpart.
And yet, it is not all happy California cows as far as the eye can see. There are a few causes for concern about the longevity of this popularity surge.
The first, ironically, is environmental. Despite the perception that grass fed beef is better for the environment, this is almost universally not the case. That is because grass fed cows are not, for the most part at least, foraging in some magical space somewhere between the Texas plains and the Garden of Eden. The grasslands must be created and maintained, frequently at the expense of rainforests and other natural vegetation.
The next has to do with cost. Not enclosing animals in a common space increases maintenance costs. Wrangling, transporting, managing, and protecting free range cows (which look like steaks on legs to a local wolf population) were all the former province of cowboys. With the advent of industrialized agriculture, the cowboy went away with the mule-drawn plow. Sure, things may go all Westworld and drones and robots may don cowboy hats sometime soon, but until then, an entire industry would need to be reborn before grass fed beef could truly go mainstream.
The final hurdle is both environmental and economic: these cows take longer to grow. By eating grass as opposed to more calorically dense and quickly-processed grains, grass fed cows take between 24-36 months to prepare for slaughter; conventional cows, eating a smorgasbord of corn and soy and who-knows-what-else, take only 14-18 months. Every day a cow remains a cow (as opposed to becoming beef), obviously increases cost, but it also takes its toll on the environment. Grass fed cows spend roughly 10-22 months longer on earth than conventional ones, and that’s a year and some change of additional, um, digestive cycles, and overall environmental impact.
And, while it is often assumed that these environmental costs are offset by not growing animal feed, grass is not a year-round plant. It also must be raised, harvested, and preserved.
Stated simply, grass fed beef will never be able to meet the world’s beef demand. If we tried, people would literally be asking “where’s the beef?” Because there wouldn’t be enough. That said, there is no telling how big the grass fed bubble can get before, or if, it pops.
Oil prices, while steadily decreasing, are historically unstable and we are already seeing a turnaround in the recent food deflation trend. Also, pork is expected to equal if not eclipse beef sales by the end of 2018, and neither of them are close to reaching the (flightless) heights of the American poultry industry, which is discovering and offering new and elevated products. Also on the horizon, lab grown,“cultured” beef, is decreasing in cost and appeals to the same environmental notions as grass fed. And we are always one good recession away from people substituting meat for peanut butter, to say nothing of abandoning any pretenses about the animal’s diet.
But for the time being for many Americans, grass is dope.
