United States-Cargill see rosy future in beef.

UNITED STATES-CARGILL SOLUTIONS.

While beef sales are down in restaurants, Fort Morgan’s Cargill Meat Solutions is still doing good business.

"Business is tough all over, but we’re plugging along," said Mike Chabot, general manager of Cargill Meat Solutions in Fort Morgan.

Workers still have 40-hour shifts, one indication that there is enough business, and demand is fair, he said.

Chabot said he does not see any prospect of that changing in the short term.

That does not mean Cargill is unaffected by the economic climate, Chabot said. It is making sure to minimize expenses and maximize profits.

People are bypassing beef for less expensive products like chicken when they order at restaurants, since the recession began to be more severe, according to the Beef and Pork Consumer Trend Report and the Poultry Consumer Trend Report, which are based on more than 3,000 restaurant customer interviews.

However, more people are eating at home and those kinds of beef sales are increasing, Chabot said.

Randy Irion, director of channel marketing at the National Cattlemen’s Beef Association, agreed with that assessment.

Sales of beef in food service are trending down — with sales of cuts like T-bones, ribeye steaks and strip steaks suffering disproportionately — but it seems more people are buying beef for cooking at home, he said.

A lot of people recognized by last September that the economy was in deep trouble and were buying more food in grocery stores and going out to eat less, Irion said.

During all of 2008, sales of all kinds of fresh meats, including chicken, pork, turkey and beef, were up about 3.3 percent and the number of pounds sold was up 3.2 percent, Irion said.

Beef sales by themselves were only up 2.2 percent and the number of pounds sold was up 2 percent, which means beef lost some of the market share overall during 2008, he said. However, beef still has 52 percent of the meat sales market.

Interestingly, after people started buying food to use at home during the last quarter of 2008, beef retail sales went up by 5.8 percent over that time last year and the number of pounds sold overall was up 3.2 percent in the last quarter, Irion said.

That does not mean there are no problems for the beef industry, he said.

Beef producers won’t be able to command the prices they did before the recession became severe, because of the lack of demand in restaurants, Irion said.

Beef packing plants are also challenged in finding markets, but the overall news is good, he said.