Economic downturn offers beef merchandising opportunity

by Bryan Salvage
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DENVER – According to the National Cattlemen’s Beef Association, a combination of factors has led to lower wholesale prices for beef, particularly middle meats, which presents retailers with marketing opportunities to promote these cuts as well as U.S.D.A. Choice beef.

As a result, the Beef Checkoff Program is encouraging retailers to capitalize on the unusual marketing environment by promoting middle meats. To assist with this effort a new tool, The Retail Pricing Matrix, is designed to help retailers take full advantage of the market conditions.

Many consumers are choosing to dine out less, which has led to a larger availability of middle meats, which, in turn, has been driving prices down. Wholesale price for Choice rib and ribeye roll are currently at the lowest level since January 2002.Wholesale prices for the strip loin sub-primal have also returned to 2002 levels. Although there will be seasonal upward trends in pricing this summer, wholesale prices are still expected to be below historical levels.

The current downward trend in middle-meat pricing, as well as the nominal pricing spread between U.S.D.A. Choice and Select grades, currently signals a great value in Choice beef according to N.C.B.A.

"Now is the time for retailers to act. Retailers can take advantage of these bargain basement wholesale beef prices and benefit by putting hot features on middle meats," said Jim Henger, executive director of channel marketing for the National Cattlemen’s Beef Association, which contracts to manage retail programs for the beef checkoff.

Consumers rank price-per-pound as the most important factor when purchasing meat, he added. "The current market has created a great avenue for retailers to capitalize upon beef’s appeal," he continued. "By sharing these savings with customers, retailers can assist their customers in trading-up rather than having to trade-down while shopping the meat case. What a bonus for consumers during these tough economic times."

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