bill roenigk roenigk consulting july 13, 2015 amelia island, florida
TRANSCRIPT
Which Will Come First100 Pounds of Chicken Consumption
or Pigs Fly?
Bill RoenigkRoenigk Consulting
July 13, 2015Amelia Island, Florida
Consumption = Disappearance
We Eat What We ProduceMinus Exports/Plus Imports
andAdjustment for Inventory Change
Over 90 Percent of Chicken Consumption Can Be Explained by Price and Disposable Consumer Income.
Corn for Ethanol Experience from 2006 through 2013 and Weak U.S. Economy Re-Confirmed this Conclusion.
USDA’s Three Measuresof Chicken ConsumptionWeight 2015 Difference FromMeasurement Pounds Carcass Weight
(estimated) ---------------- % ---------------
Boneless 62.8 60Retail* 90.0 86Carcass 104.7
* Most often reported by USDANote: “Chicken” includes young meat chicken and (broilers) and “other” chicken (spent fowl)
19701972
19741976
19781980
19821984
19861988
19901992
19941996
19982000
20022004
20062008
20102012
20142016
35.0
40.0
45.0
50.0
55.0
60.0
65.0
70.0
75.0
80.0
85.0
90.0
95.0p
ou
nd
s p
er
pe
rso
n (
reta
il w
eig
ht)
Average Annual Growth Rate: 1.9%
Per Capita Chicken Consumption
1970 to Forecast 2016
Source: USDA
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
Per Capita ConsumptionChicken, Beef, and Pork1970 to Forecasted 2016
Beef Pork Chicken
po
un
ds
pe
r p
ers
on
Beef
Chicken
Pork
USDA Data
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
180.0
190.0
200.0
210.0
220.0
230.0
Per Capita ConsumptionOf All Meats Combined1970 to Forecast 2016
po
un
ds
pe
r p
ers
on
Average = 204.8
USDA Data
When Chicken Consumption Surpassed
Pork and Beef?Pork Beef
--------------------------------------- weight basis ----------------------------------------
Retail Boneless Retail Boneless
Year 1982 1994 1992 2010
Source: USDA/ERS
Consumption ≠ Demand
Demand:Pounds Consumed
Price Consumers Paid
Outcome Compared with Expectation (Elasticity)
U.S. Monthly Domestic Retail Meat Demand
Ron Plain, University of Missouri
Pork Beef Young Chicken Turkey All 4 Meats
CurrentMonth
Last 12Months
CurrentMonth
Last 12Months
CurrentMonth
Last 12Months
CurrentMonth
Last 12Months
CurrentMonth
Last 12Months
Percent Change in Retail Demand From 1 Year Earlier
Mar 14 0.9 4.9 1.8 1.3 7.8 3.2 -3.9 0.0 3.2 2.7
Apr 14 6.7 5.0 4.0 1.0 3.3 3.4 -8.1 -0.7 4.1 2.7
May 14 10.0 5.6 6.8 1.5 -1.6 3.1 -4.6 -0.7 4.6 2.9
Jun 14 3.8 5.4 1.6 1.5 0.5 3.1 -3.1 -0.6 1.7 2.9
Jul 14 3.7 5.2 0.7 1.5 -2.1 2.9 -10.0 -1.2 0.2 2.8
Aug 14 3.0 4.9 9.3 2.0 -1.3 2.3 -3.9 -1.4 4.0 2.7
Sep 14 9.3 5.6 11.4 2.9 -1.9 1.4 -10.0 -2.6 5.6 2.9
Oct 14 8.1 5.7 8.7 3.3 -0.6 0.7 -1.9 -2.7 5.2 2.9
Nov 14 7.2 5.8 11.0 4.1 6.4 1.1 -9.8 -4.7 7.3 3.2
Dec 14 6.8 5.8 10.3 5.1 2.5 0.7 -7.1 -6.1 6.3 3.4
Jan 15 15.0 6.7 16.3 6.9 13.8 2.5 -9.7 -6.5 14.1 4.9
Feb 15 11.6 7.2 12.5 7.9 3.8 2.6 -6.2 -6.5 8.9 5.4
Mar 15 12.3 8.1 7.6 8.4 4.1 2.2 -1.4 -6.3 +7.4 5.8
Apr 15 2.2 7.7 5.1 8.5 6.2 2.5 1.8 -5.5 4.6 5.8
U.S. Annual Domestic Retail Meat Demand
Pork Beef Young Chicken- Turkey All 4 Meats
Percent Index Percent Index Percent Index Percent Index Percent Index
Change 1998 Change 1998 Change 1998 Change 1998 Change 1998
Year Ago 100 Year Ago 100 Year Ago 100 Year Ago 100 Year Ago 100
1998 100 100 100 100 100
1999 0.4 100.4 2.8 102.8 4.9 104.9 -2.7 97.3 2.6 102.6
2000 -0.2 100.2 2.5 105.4 -1.5 103.4 -1.1 96.3 0.5 103.1
2001 -0.7 99.5 3.2 108.7 -1.2 102.1 3.6 99.8 0.9 104
2002 0.3 99.8 -0.2 108.6 6.2 108.4 -2.4 97.4 1.7 105.8
2003 -1 98.8 3.9 112.9 -0.6 107.7 -1 96.4 1 106.8
2004 0.6 99.4 6.5 120.2 6.6 114.9 -4.1 92.5 4.8 111.9
2005 -3.8 95.6 -2.7 117 0.3 115.2 -5.1 87.7 -2 109.7
2006 -3.7 92.1 -3.6 112.7 -7.8 106.2 1.5 89 -4.8 104.4
2007 1.9 93.8 0 112.8 -0.3 106 3.4 92 0.5 105
2008 -4 90.1 -4.5 107.7 -1.1 104.8 5 96.6 -3 101.8
2009 1.4 91.4 -2.7 104.8 -2.4 102.3 5.8 102.2 -1.5 100.3
2010 -1 90.5 -1.4 103.3 0.9 103.3 -0.4 101.8 -0.5 99.9
2011 1.1 91.5 0.8 104.1 -1.2 102.1 0.9 102.7 0.4 100.3
2012 -0.6 91 1.3 105.5 0.8 102.9 -0.4 102.4 0.5 100.7
2013 4.6 95.2 1.7 107.3 3.5 106.5 0.6 102.9 3 103.7
2014 5.9 100.8 4.9 112.6 0.5 107.1 -6.1 96.7 3.4 107.3
Ron Plain, University of Missouri
U.S. Annual Domestic Retail Meat Demand
Total US – Fresh Meat SalesApril 2015
Dollars – Total
*Other includes Exotic, Non Meat and Unknown.Sourced from FreshLook data, categorized by the VMMEAT® System Four Weeks Ending 04/26/15
4 WEEKS 13 WEEKS 52 WEEKS
Class 03/30/15-04/26/15 % Change WE 04/26/15 % Change WE 04/26/15 % Change
TOTAL MEAT $3,745,481,375 + 2.5% $12,041,933,846 + 5.4% $48,671,130,047 + 6.4%
Beef $1,781,419,933 + 3.9% $6,021,368,088 + 6.2% $23,880,828,635 + 6.7%
Chicken $892,058,810 + 5.2% $2,959,060,559 + 5.7% $11,676,704,401 + 6.3%
Pork $815,656,674 - 0.8% $2,297,902,048 + 4.7% $9,340,375,880 + 5.8%
Turkey $173,244,091 + 0.5% $539,953,666 + 4.2% $2,815,970,775 + 5.3%
Lamb $49,126,346 - 3.4% $114,628,943 + 6.0% $386,027,454 + 9.5%
Veal $5,994,263 - 15.6% $22,018,096 - 9.1% $89,881,417 + 0.2%
Other* $27,981,258 - 23.9% $87,002,445 - 24.7% $481,341,485 + 7.7%
Pounds - Total 4 WEEKS 13 WEEKS 52 WEEKS
Class 03/30/15-04/26/15 % Change WE 04/26/15 % Change WE 04/26/15 % Change
TOTAL MEAT 1,089,178,886 - 1.1% 3,400,869,454 - 1.4% 14,159,367,976 - 2.9%
Beef 325,846,289 - 5.5% 1,128,593,717 - 7.0% 4,579,589,836 - 7.8%
Chicken 371,264,841 + 1.8% 1,232,147,402 + 1.3% 4,933,538,056 + 2.4%
Pork 317,561,955 + 2.8% 823,869,876 + 4.5% 3,098,732,968 - 4.8%
Turkey 58,823,286 - 6.2% 173,385,432 - 0.4% 1,346,612,890 + 1.0%
Lamb 7,255,632 - 8.9% 16,259,386 + 0.1% 53,812,431 + 5.0%
Veal 853,486 - 21.9% 3,207,869 - 13.9% 13,407,166 - 0.5%
Other* 7,573,397 - 34.5% 23,405,773 - 38.7% 133,674,629 - 10.4%
Average Price/Pound 4 WEEKS 13 WEEKS 52 WEEKS
Class 03/30/15-04/26/15 % Change WE 04/26/15 % Change WE 04/26/15 % Change
TOTAL MEAT $3.44 + 3.7% $3.54 + 6.9% $3.44 + 9.6%
Beef $5.47 + 9.9% $5.34 + 14.2% $5.21 + 15.7%
Chicken $2.40 + 3.4% $2.40 + 4.3% $2.37 + 3.8%
Pork $2.57 - 3.6% $2.79 + 0.2% $3.01 + 11.1%
Turkey $2.95 + 7.1% $3.11 + 4.6% $2.09 + 4.2%
Lamb $6.77 + 6.0% $7.05 + 5.9% $7.17 + 4.4%
Veal $7.02 + 8.0% $6.86 + 5.5% $6.70 + 0.7%
Other* $3.69 + 16.2% $3.72 + 22.7% $3.60 + 20.2%
Total US – Fresh Meat Feature and PromotionApril 2015
Feature Outlet Count - Total
4 WEEKS 13 WEEKS 52 WEEKS
Class 3/30/15 - 4/26/15 % Change WE 4/26/15 % Change WE 4/26/15 % Change
TOTAL MEAT
967,512 4.4% 3,066,111 0.3% 12,006,354 -8.1%
Beef 361,600 3.9% 1,201,310 8.1% 4,416,475 -10.7%
Chicken 246,837 1.8% 791,722 -12.0% 3,459,069 -5.0%
Lamb 29,800 -18.3% 70,080 -6.9% 242,380 -17.9%
Pork 237,240 22.8% 751,420 5.3% 2,713,100 -9.5%
Turkey 87,625 -14.1% 237,429 1.0% 1,125,460 1.9%
Veal 4,410 -14.7% 14,150 -40.4% 49,870 -41.5%
Class – Fresh meat cuts, ground meat and poultry parts. Excludes ham, bacon, franks, sausage, lunch meats, prepared products and offal. Feature Outlet Count – Total of sample stores with ad. Feature Outlet Share – Outlets with ad as a percent to the total ad outlets. Feature Average Price – Total outlets with ad times the ad price divided by the ad count. Promotion Percent on Sale – Feature sales as a percent to total sales. Promotion Weighted Sale Price – Feature sales divided by feature pounds.Source by USDA Market News and FreshLook Marketing, categorized by the VMMEAT® System
Feature Outlet Share - Total 4 WEEKS 13 WEEKS 52 WEEKS
Class 3/30/15 - 4/26/15 % Change WE 4/26/15 % Change WE 4/26/15 % Change
TOTAL MEAT
100.0% 100.0% 100.0%
Beef 37.4% -0.2% 39.2% 2.9% 36.8% -1.0%
Chicken 25.5% -0.6% 25.8% -3.6% 28.8% 0.9%
Lamb 3.1% -0.9% 2.3% -0.2% 2.0% -0.2%
Pork 24.5% 3.7% 24.5% 1.2% 22.6% -0.3%
Turkey 9.1% -1.9% 7.7% 0.1% 9.4% 0.9%
Veal 0.5% -0.1% 0.5% -0.3% 0.4% -0.2%
Feature Average Price 4 WEEKS 13 WEEKS 52 WEEKS
Class 3/30/15 - 4/26/15 % Change WE 4/26/15 % Change WE 4/26/15 % Change
TOTAL MEAT
$4.16 2.7% $4.18 9.3% $4.09 10.1%
Beef $6.05 6.8% $5.98 10.9% $5.89 15.1%
Chicken $2.61 4.4% $2.63 5.0% $2.70 6.7%
Lamb $6.99 1.1% $7.19 5.0% $7.27 4.5%
Pork $2.91 -8.5% $2.91 1.7% $3.12 11.7%
Turkey $2.88 8.8% $3.11 0.3% $2.79 1.9%
Veal $8.78 15.0% $8.58 24.3% $8.10 13.7%
Promotion – Percent on SaleAnd Weighted Sale Price
4 WEEKS 13 WEEKS 52 WEEKS
Class 3/30/15 - 4/26/15 WE 4/26/15 WE 4/26/15
TOTAL MEAT
25.9% $3.12 26.4% $3.12 25.9% $2.93
Beef 25.1% $5.28 25.5% $5.07 25.0% $5.00
Chicken 23.4% $1.93 24.7% $1.95 24.4% $1.96
Lamb 33.6% $2.45 35.5% $2.54 31.3% $2.71
Pork 19.1% $2.28 17.2% $2.45 27.3% $1.31
Turkey 38.2% $5.67 27.6% $6.01 21.9% $6.04
Veal 12.4% $6.56 12.7% $6.45 15.0% $6.08
Retail Beef Performance
FreshLook Marketing and USDA Market News
April 2015 Highlights can be downloaded at:
http://www.beefretail.org/CMDocs/BeefRetail2/Sales%20Data/Sales%20Featuring/4-15-Top-Line-Final.pdf
USDA Chicken Weight Category
4.25 pounds & under: normally marketed bone-in into fastfood/foodservice sectors; may include Cornish hens.
4.26 pounds to 6.25 pounds: normally marketed into retail grocery sector in tray-pack or bagged forms.
Source: USDA/Agricultural Marketing Service
USDA Chicken Weight Category6.26 pounds to 7.75 pounds: normally
marketed either into retail grocery sector in tray-pack and quick-frozen form or further processed and marketed into various sectors.
7.76 pounds & heavier: normally marketed deboned or as roasters/roasting chickens.
Source: USDA/Agricultural Marketing Service
Cont’d.
Young Meat Chicken Slaughtered Under FederalInspection by Liveweight Category4.25
pounds& under
4.26 to 6.25
pounds6.26 to
7.75liveweigh
t
7.76 pounds
&heavier
Total Number
of Chickens
Year -------------------------- percent ------------------------- --000--
2014 26.4 34.2 19.5 19.9 7,962,523
2013 26.9 35.5 19.4 18.3 7,968,913
2012 24.2 40.7 19.3 15.6 7,874,506
2011 23.0 42.9 19.1 15.1 8,085,700
2010 24.1 47.2 16.4 12.3 8,334,894
2009 24.9 50.5 13.9 10.7 8,117,428
2008 25.4 48.5 15.1 11.0 8,388,473
2007 26.5 49.5 16.2 7.8 8,402,576
2006 28.2 49.7 13.9 8.2 8,343,196
2005 29.3 47.9 16.7 6.1 8,351,179
Sou
rce:
US
DA
/Ag
ricu
ltu
ral
Mark
eti
ng
S
erv
ice
Share and Change in Number of Chickensand Weight for Liveweight Categories
4.25& under
4.26 to6.25
6.26 to7.75
7.76& heavier
Year number
weight
number
weight
number
weight
number
weight
2014 26.4 16.6 34.2 31.3 19.5 22.5 19.9 29.6
2005 29.3 20.6 47.9 48.1 16.7 21.7 6.1 9.6
Change From2005 to 2014
---------------------------------- percent ----------------------------------------
-10 -19 -29 -35 17 4 226 208
19701972
19741976
19781980
19821984
19861988
19901992
19941996
19982000
20022004
20062008
20102012
20142016
20182020
202235.0
40.0
45.0
50.0
55.0
60.0
65.0
70.0
75.0
80.0
85.0
90.0
95.0
100.0
105.0
Per Capita ConsumptionChicken
1970 to projected 2022
po
un
ds
pe
r p
ers
on
(re
tail
we
igh
t)
Average Annual Growth Rate: 1.9%Average Annual Growth Rate: 1.9%Average Annual Growth Rate: 1.9%
-6%
-4%
-2%
0%
2%
4%
6%
8%
-5%
7%
-1%
1%
Per
cent
Carb Processed Total Processed FoodProtein Processed Commodity Protein Index*
Exhibit 1: Volume consumption of processed protein foods has grown 7% since 2009 com-pared to a 5% decline in processed carbohydrates from 2009 to 2013.
Source: Nielsen xAOC, USDA. *Commodity Protein Index developed by Credit Suisse by multiplying USDA-measured domestic use of beef, pork and chicken (in pounds) by the average retail price index of each pro-tein as measured by USDA's Economic Research Service. Source: The Return of the Caveman, April 2014. Credit Suisse.
What Factors Could Accelerate/Decelerate Consumption
Trend Line
Price/Cost
State of U.S. Economy in Future years
Impact of Competing Meats
New Products
“Events”
Thank You for Your Attention!
Any Questions?