Monday, January 31, 2005

Chicken or Beef?

Would you rather have chicken or beef? Obviously Americans prefer chicken even though there is the new Atkins diet (no carb diet). It could also be due to the fact that milk and beef are cutting down profits and growth in consumer demand. That could also be because of the weak dollar. The consumption of chicken on the other hand has actually been rising. Chicken is getting cheaper; average price is $1.30 when it should be around $1.40.

Reasons why chicken is cheaper:
There is a lower feed ingredient costs (supply)
Rising exports
Strong demand

There has been a 20% increase in revenue from last year (beef revenues fell). By October chicken accounted for less than 1/3 of the sales (60% of total operating income), while beef has a 45% of total sales (less than 14% operating income). Basically people would rather substitute chicken which is cheaper than paying higher prices for beef. In 2004, the U.S chicken consumption per capita is 85.6 pounds.

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