Meat Commodity Markets

Weakness relative to other proteins points to upside potential, especially for 81% and ground chuck

While the prices of many staple protein items like chicken breast, pork loins, and steaks have escalated rapidly over the course of this year, and even more so in recent weeks, ground beef prices remain relatively weak. Our work indicates that many retailers expect to focus more on maintaining or growing market share this year through an emphasis on price. We also see the consumer as more likely to be price sensitive in the store as spending on restaurants, as well as travel and entertainment in other industries, is expected to continue to increase. We believe this sets the stage for lower priced proteins to receive more attention for promotional activity moving forward, likely creating more demand for ground beef. Other positive demand factors include optimism for a strong grilling season as groups are more likely to get together than last year. The retail sector tends to focus on 81% ground beef and ground chuck, and since we see this as the channel with the most demand upside, this analysis focuses on these two items, but movement in other grinds would likely be correlated.

Download the 2021 Ground Beef Commodity Report

Key Points

1. Ground beef prices are relatively low compared to both competing and correlated proteins. As a result, we believe meat buyers are viewing ground beef prices as attractive compared to other proteins, triggering demand improvements.

2. Our work suggests demand trends are shifting towards value plays over the course of 2021, especially in retail channels. We see this as bullish for wholesale ground beef prices, especially 81% and ground chuck.

3. We are forecasting 81% ground beef to increase by at least 15-20% over the next two months, with similar trends likely for ground chuck and 73% ground beef.

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