Consumer meat sales hit record-breaking levels last year. The craze for protein-filled diets has been a storyline that’s helped drive meat demand, which is good news for meat producers. Ag economists warn, however, the major limiting factor for meat demand, and meat prices, in 2025 just may be what happens in the overall economy.
The March Ag Economists’ Monthly Monitor asked economists if they think the U.S. general economy will see a recession in 2025, and 62% said yes.
Recent reports agree with that sentiment, as the Federal Reserve’s key inflation index rose more than expected in February and consumer spending posted a smaller-than-projected increase, according to the Commerce Department. Both could be warning signs of what’s ahead.
As a follow up question, The Ag Economists’ Monthly Monitor survey asked, “In what ways does the U.S. economy impact meat demand in 2025?” Respondents had no shortage of opinions on that.
Here’s a rundown of some of their reactions:
- “If real wages fall, there will be a substitution toward other protein/cheaper meat cuts.”
- “Slower growth (even if the U.S. does not endure a recession) will reduce consumer willingness to spend, especially at a time when beef prices, in particular, are high.”
- “A downturn in economic growth impacts disposable income and should slow animal protein demand.”
- “There is a positive correlation between GDP and meat demand, particularly between GDP and higher end cuts.”
- “When the U.S. economy is strong and incomes increase, consumers have more disposable income to spend on meat and higher quality cuts of meat. When the U.S. economy is weak and disposable income tightens, consumers may reduce meat in their diet or turn to less expensive meat options.”
Not all economists expect U.S. consumer demand to fall off though, even if the U.S. officially enters into a recession.
“Labor income is growing faster than inflation. Most U.S. firms are profitable - at least as of current earnings reports,” said one economist.
Another shared, “I do think consumer demand will be lower in 2025 than it was in 2024. That being said - 2024 consumer expenditures and demand were a lot higher than I anticipated at the beginning of the year. Two indicators that are showing up, and are unsustainable right now, are reducing savings accounts and increasing credit card debt. I think it leads to slower meat demand in 2025, partially due to lower meat availability and partially due to slowing consumer demand. Notice I said ‘slowing’ consumer demand and not ‘declining/negative’. Demand does not have to decline year-over-year to impact meat prices. Slowing can do the same thing.”
The GLP-1 Effect
What could have an even bigger impact on meat demand, and even more so than inflation and a recession, is the use of GLP-1 drugs for weight loss. GLP-1 drugs not only moderate users’ blood sugar levels, but also affect their appetites by suppressing hunger cravings.
“U.S. consumer preference for meat demand is strong, though I would be paying attention to the growing use of GLP-1s as it relates to all agricultural product demand,” one economist responded.
The good news is studies have shown those who use GLP-1 drugs often crave healthier items and often consume more protein versus unhealthy foods.
Starting From a Place of Strength
Forecasting meat demand in 2025 relies on a number of factors. But a positive trend is how consumers, especially the millennial generation, are buying more meat. As PorkBusiness.com reported this week, consumers are buying more meat than ever. In 2024, meat sales hit a record high of $104.6 billion and total pounds sold increased by 2.3%, which was cited in the latest Power of Meat.
More people want meat today, but economists are concerned any economic pain could eat into overall meat demand.
