Beef Quarterly Q4 2020: Changed Beef Consumption Habits Following Covid-19 Create Opportunities
The global Covid-19 pandemic and African swine fever (ASF) have changed beef consumption patterns through 2020. While total beef consumption has not seen too much change, we have seen distribution channels change, benefiting some at the expense of others. As the impacts of ASF are overcome and disruptions from Covid-19 subside, old distribution channels will recover. “It is likely that many consumers will revert to their previous habits, but we do see opportunities for those stakeholders in the supply chain that have gained through this period to hang on to new consumers and ‘lock-in’ new consumption habits,” according to Angus Gidley-Baird, Senior Analyst – Animal Protein.
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Here is a brief summary of Covid-19 impacts:
Brazil – The number of new cases has been falling since the end of July. The foodservice channel is operating with reduced capacity. The arrival of warmer weather limits the spread of the virus, but the risks of rising new cases increase with the proximity of the holiday season.
US – Covid-19 cases are increasing. In many areas, restrictions on gatherings are being reinstated. Many localities have also reintroduced restrictions or even outright bans on indoor dining. With colder weather, outdoor patio dining will struggle to make up the difference. Many schools are shifting back to virtual learning or simply not returning to classes after the Thanksgiving holiday.
China – While Covid-19 is largely under control in mainland China, cases of imported frozen meat and seafood affected by the virus have been continuously reported. This will lead to stricter inspection at ports and local cold chain/storage, which will likely slow down imports.
Europe – A second ‘lockdown’ is now underway, with out-of-home consumption restricted or closed in most European countries. Consumption of beef and veal will decline accordingly, as increased retail sales have not compensated for losses in foodservice. It appears that these restrictions will last into 2021.
Canada – Outside of a few isolated Covid-19-related challenges, Canadian beef processors have resumed normal operations. Canada’s fed cattle backlog has been slower to clear than the US. As of 1 October, cattle on feed greater than 150 days was 31% higher than in 2019.
Indonesia – Foodservice outlets and domestic air travel have reopened since June, but traffic only started to pick up in late August. Beef demand still lags last year as Covid-19 has reduced consumer purchasing power. As beef supplies shifted towards cheaper imports, lot feeders remain cautious in restocking due to losses YTD.
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Angus Gidley-BairdSenior Analyst - Animal Protein Read more