MADISON — Jeff Swenson, livestock and meat specialist at the Wisconsin Department of Agriculture, Trade and Consumer Protection, was speechless last week as he looked out into the audience at the department’s first “Meating,” a quarterly get together of those in Wisconsin’s meat industry.
He saw a lot of familiar faces, but also a lot of new ones — and he hopes to get to know those people better as these meetings continue, modeled similarly after DATCP’s “Dairy Exchange” meetings, held every few months in Madison to share information about the state’s dairy industry and network.
DATCP secretary-designee Brad Pfaff was also pleased with the turnout, but it shouldn’t come as a huge surprise to the farm boy, who grew up in the vicinity of several neighboring locker plants in La Crosse County.
“We’re a large animal agriculture state,” Pfaff said. “We have a lot of cattle, and they play an important role in our economy and in our communities.
“This is the first of, I hope, many ‘meatings’ as we begin the process of reinvesting in our state.”
Brenda Boetel, a professor of agricultural economics at UW-River Falls, was the first person Swenson thought of when asked by Pfaff and Norm Munsen, DATCP value-added dairy specialist, who the speaker at the first ‘Meating’ should be. Additionally, George Manak, a strategic marketing director specializing in meat end use at Kerry, was also a guest at the meeting, sharing meat and food trends that are being analyzed at the food and ingredient company.
There are a handful of key market factors impacting beef and pork production in the U.S., Boetel explained during her presentation. On the demand side, economies in the world and in the U.S. are impactful, along with exports and trade policy. On the supply side, feed concerns, a record number of meat production in the U.S. and world, and the current situations at feed yards and slaughter facilities have also impacted U.S. production.
With U.S. economic growth still positive, but slowing, many are also wondering if a recession is lurking. Boetel said it’s hard to predict exactly — from an economic standpoint, she, and other economists, don’t know if there’s a recession until the country is in one. But indicators, such as employment, production and sales, peak just before a suspected recession, leading her to believe a recession may be close.
Those that watch the Restaurant Performance Index may also find clues to how meat prices will be impacted through 2019. Even though the index was up slightly in August, restaurant owners have worsening expectations within the next six months, which means they likely won’t be placing higher priced cuts of meat on their menus. Instead, they may be adding more substitutions — sometimes of other beef or pork cuts, but more often they substitute poultry.
This will probably be a peak year for beef production in the U.S. as there has been a large increase in beef production over the past few years, Boetel added.
Pork production has also increased over the years, and there is a lot of talk about pork in the world market as China fights African Swine Fever, a deadly virus that has killed millions of pigs in China. The Chinese price for pork is at an all-time high, up 155% over 2018. The government is also offering subsidies to Chinese pork producers who move toward more commercialized production as the majority of Chinese pork producers are operating on a smaller scale.
With both pork and beef, the U.S. continues to have large supplies so the packers have the market power right now, Boetel said. She advised that it won’t always remain that way though as when supplies are low, the power will go back to the producers.
Meat producers in the state should be watchful of factors that may contribute to the overall outlook as 2019 winds down. Trade will likely be the biggest factor, but they should also keep an eye on the economy, particularly if the U.S. is heading for a recession. Discussion around lab-created meats and possible impacts from those will also continue to be a factor, along with immigration reform, which is always a consideration, Boetel said.
“The food industry is in a state of flux,” said Manak as he began his presentation. “There are a lot of things happening right now that will be shaping the future of the world.”
With almost 30 years in the food industry, Manak also has the pleasure of learning from his two millennial children about how these consumers think, connecting their thoughts to food trends being observed at Kerry. He reported that Kerry and other large food companies are having very thoughtful and in-depth strategic discussions in relation to these consumer habits, with protein rising to the top of these conversations.
“The protein industry landscape is huge, and there’s a lot of churn happening in that landscape right now,” Manak said.
On the taste side of protein, consumers are craving homestyle ingredients, the incorporation of alcohol as an ingredient, U.S. regional flavors, smoked meats and seafood, savory flavors and craft or artisanal meat products.
On the nutrition side of protein, consumers are participating more in meat limiting, such as Meatless Monday or other “flexitarian” lifestyle choices; are using food as medicine; are consuming more meats with Omega 3s and tumeric; are still heavily interested in Farm to Fork; and support transparency and clean labeling. They are also on diets that lean heavily on meat consumption, such as Paleo and Keto, which can be an opportunity for those in the meat industry.
While the top growing burger trends include higher cuts of meat like brisket and short rib, along with prized Waygu cuts, plant-based burgers are also trending. In fact, analysts at Barclays predict meat alternatives will jump to a $140 billion business by 2029.
“We can’t ignore them and hope they go away,” Manak said of the alternative meat producing companies.
Alternative meats are making their way into mainstream restaurants, and more recently, into deli and meat cases in grocery stores across the country. Blended items that feature both real meat and an alternate protein are also emerging and are being offered as options to consumers.
But to win consumers, Manak said the product “can’t just taste good. It needs to engage all senses” as more and more consumers demand an experience with their products.
Those interested in attending the next “Meating” at DATCP can be added to an email list which informs of upcoming events, by contacting Jeff Swenson at Jeffrey.Swenson@wisconsin.gov or calling 608-224-5082.
The next “Meating” will tentatively cover the history of meat processing in Wisconsin. A date has yet to be set.