{"content":[{"text":"Changes in consumer preferences will \n disrupt future agricultural markets \n According to a May 6, 2021 Wall Street Journal article, “Chicken shortage sends prices \n soaring, and restaurants can’t keep up,” by Heather Haddon and Jacob Bunge, “At the start of \n 2021, chicken looked like a bargain for U.S. restaurants. Closures and dining room restrictions \n had contributed to swollen stockpiles of chicken in cold-storage facilities. Boneless skinless \n chicken breast, the poultry industry’s flagship product, last year averaged around $1 a pound, \n according to Urner Barry. Now boneless chicken breast is trading at $2.04 a pound, the firm said. \n Over the past decade, the price averaged about $1.32 a pound (https://tinyurl.com/jvb8kb6k). \n The authors attribute part of the reason for the price increase to the “chicken sandwich \n wars of recent years.” The summer grilling season is also expected to maintain the upward \n pressure on chicken supplies. \n Given the higher prices, we are tempted to ask one of our favorite questions: “Will high \n prices cure high prices?” After all that is what happens in grain markets (see our recent article on \n this topic at http://www.agpolicy.org/weekcol/2021/1066.html). \n But there are significant differences. In the case of grain markets, farmers have little \n pricing power because a large number of producers face a relatively small number of buyers. As \n farmers respond to high grain prices by producing more, prices fall quickly. But with low prices \n farmers seek to maintain or increase production levels in hopes of reducing their per unit cost of \n production. \n In the chicken industry, the landscape looks quite different. On the supply side, a handful \n of very large firms control a significant portion of total production and on the demand side a \n relatively small number of firms account for a large percentage of wholesale poultry purchases, \n giving them a countervailing pricing-power that independent grain farmers lack. \n In this case, we are less interested in analyzing the short-to-medium run supply-demand \n balance in the broiler industry than in examining the long-term picture. \n Between 1970 and 2020, US per capita demand for chicken (broilers) increased from \n 25.3 pounds (boneless retail weight) per capita to 67.4 pounds per capita. Over that same 50-year \n period, US per capita demand for pork remained steady (1970: 48.5 pounds; 2020: 48.8 pounds) \n while beef demand fell by 30 percent (1970: 79.8 pounds; 2020: 55.8 pounds). \n Most analysts agree that the shift in the per capita consumption of beef and chicken over \n the last 50 years was largely driven by two factors. First, chicken is less expensive than beef. \n Second, and we think more important, the general perception was that chicken was a healthier \n source of animal protein than beef. The fat in a good steak was seen as artery clogging, while \n chicken was seen as a lean meat. The fact that much of the chicken was breaded and deep or pan \n fried was ignored. \n Beef producers voted for a beef checkoff under the supervision of the USDA to fund a \n program to increase the demand for beef. One of the results was an advertising campaign, “Beef. \n It’s What’s For Dinner.” Pork producers were in the game with their own checkoff and campaign \n slogan, “Pork. The Other White Meat.” Chicken producers, dominated by large integrators, \n chose to spend their money advertising their own brands instead of seeking a USDA supervised \n checkoff program. \n In 2021, there is a new kid on the block: plant-based protein (often referred to as “fake \n meat”) which can simulate the taste and texture of beef, pork, and chicken. Despite the slightly","bbox":{"left":0.117647,"top":0.087455,"width":0.764804,"height":0.8208169999999999}}],"images_bbox":[],"images_bbox_not_text_overlap":[]}