The drop in beef consumption gave rise to an increase in chicken and pork consumption, showing that there is a substitution effect towards these types of meat.
Worldwide, Argentina is the country with higher consumption of beef with 51 kilos per person per year. However, in recent years this consumption began to reverse. This record is 23.1 kilograms less than 30 years ago, when consumption was 74.1 kilograms, that is, beef consumption fell by 31% in that period, according to a study prepared by UADE.
The fall in beef consumption gave space to increased consumption of chicken and pork, evidenced that there is a substitution effect towards these types of meat. In January 2017, 43.5 kilograms of chicken and 12.8 kilograms of pork were consumed. In September 2023, 45.9 kilograms of chicken and 16.7 kilograms of pork were consumed, meaning that, during that period of time, chicken consumption grew by 5.5% and pork consumption by 30.5%.
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Beef: what is the impact of the price
Among several causes that can affect the consumption of beef, the increase of the prices and the loss of purchasing power of Argentines are among the main ones.
In September 2023 the total meat consumption (beef, chicken and pork) was 113.6 KGof which beef represented 44.9%, chicken 40.4% and pork 14.7%.
In the last 6 years and 9 months, there is a positive correlation between the fall in beef consumption and the loss of purchasing power of Argentines’ income and price increases. In nominal terms, at the beginning of January 2017 an average kg of all cuts of beef cost $114.
In September 2023, the value was $3,108. During that period, the average value of a kilo of meat increased by 2,726%. So far in 2023 alone, the average price of meat is close to tripling, going from being worth $1,241 in January to $3,108 in the last month.
The price of chicken and pork has increased significantly, as has beef, but its value remains lower (even a kilo of chicken costs half as much as a kilo of meat).
This is one of the reasons why many consumers have recently opted for replace the consumption of beef for chicken or pork. In any case, it is worth highlighting that beef consumption in Argentina shows a certain inelasticity, since, despite the sustained increases in prices, the Consumption fell to a lesser extent than prices increased.
Since the beginning of 2021, beef prices have shown sustained growth above inflation. In September 2023, the meat price index measured from January 2017 to date maintains a gap of 20.3% above the general price level.
Source: Ambito
