SOUTHERN JOURNAL OF AGRICULTURAL ECONOMICS
DECEMBER, 1979
GROUND BEEF: IMPLICATIONS FOR THE
SOUTHEASTERN U.S. BEEF INDUSTRY
J. Richard Conner and Robert W. Rogers
Currently the United States consumes an
estimated 39 to 45 percent of its beef in the
“ground”1 form [3, 7, 8]. As recently as 1972
the estimated percentage of beef consumed as
ground was only 33 [3] and some industry
leaders have estimated the proportion by 1985
to be from 50 to 65 percent [5, 8, 11, 12]. This
increasing trend in the percentage of beef con-
sumed in the ground form is often attributed to
several factors including (1) an increase in the
percentage of wives working away from home
which results in more “eating out” and less
home preparation of “traditional” meat dishes
for those meals consumed at home, and (2) the
continuing growth of the fast-food restaurants
and their popular “hamburger” meals [5, 8, 11,
12].
The demand for ground beef is currently sup-
plied from the following sources: 13 percent
from imported deboned beef, 35 percent from
the block beef trade (trimmings, ground chuck,
“over-aged” block beef, etc.), 11 percent from
nonfed steer and heifer slaughter, and 41 per-
cent from boneless manufacturing beef (prin-
cipally cows and bulls) [5]. During the next few
years, however, a 25 to 30 percent reduction is
expected in the slaughter of nonfed steers and
heifers and of cows and bulls because of the re-
building phase of the cattle cycle and the ac-
companying increases in the prices of feeder
and breeding classes of cattle [5]. These factors
could result in an approximate 15 percent re-
duction in the total current supply of beef for
the “ground beef” trade. The prospects of this
reduction in the current supply raises the ques-
tion of how the current quantity demanded and
the expected increases in demand for ground
beef can be met.
Several agricultural scientists and industry
experts have proposed two basic alternatives
for meeting the demand for ground beef. One is
to take more beef from the block beef trade
(presumably from the relatively less expensive
chuck and/or round primais, leaving the loin
and rib primais for the block beef trade) [8,11].
The second proposed alternative is to develop
feeding (growing-out) programs that will
produce lean beef cattle for slaughter from
which the entire2 deboned carcass could be
used for producing ground beef [3, 5, 8].
Though both of the proposed alternative
sources of ground beef supply are plausible,
the second alternative is of particular
significance to the beef industry in the South-
eastern United States. If significant markets
for steers and heifers suitable only for produc-
ing deboned beef for use in the ground beef
trade could be developed, the Southeastern
United States could conceivably compete
favorably with other regions in both the pro-
duction and slaughter of such animals. The
Southeast’s presumed advantages would be its
long growing season and climate favorable for
quality forage production, its relatively large
supply of weaned calves, and its current
slaughter capacity. The basis of the presumed
advantage in production is the belief, held by
many beef producers, that high quality forages
alone can provide sufficient energy and protein
for growing beef cattle, whereas forages alone
do not consistently provide sufficient levels of
energy for producing “finished” beef cattle.
Thus, if slaughter prices of “grown-out” steers
and heifers were Idgh enough to offer produc-
ers a larger profit than they could obtain from
selling their calves and yearlings to traditional
“finishing” feedlots, Southeastern beef pro-
ducers would have an attractive alternative
beef production enterprise.
Because of the probably significant impact
of this proposed alternative beef production en-
terprise on the Southeastern beef industry and
economy, the feasibility of the development of
a market for “hamburger steers” should be
carefully evaluated.
In pursuing this evaluation, the authors ig-
nore the question of whether the observed
trend over the past few years toward larger
percentages of beef being consumed as ground
represents a shift in consumers’ tastes and
■The term “ground beef" in this article includes beef used in hamburger, ground chuck, etc., and beef used in sausage and “processed" meats and "reformed
beef products.
1The authors recognize that in using nonfed or “grown-out" beef carcasses the beef packing industry would probably not take the entire carcass for ground beef. In-
stead, the tender, ribeye, loin strip and top round would probably be diverted to the block beef trade.
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