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With several high profile cases of avian ‘flu in US poultry flocks and one of a BSE cow, it might have been expected that the US meat industry would to be in for some hard times, with vegetarians in the ascendancy. The reality, however, has been quite the opposite. (585 words)

Although the cattle market did take a hiding for a month or so following the announcement of the BSE just before Christmas, it has now recovered everything it lost and is trading at record levels, with the same story for just about all US meat markets. Likewise the hamburger and streak restaurant chains, meat packers and just about anybody involved in meat from the field to the fork who were expected to be for a rough spell seem to be doing very well.

While there are a number of reasons for the contrast between the fortunes of European and US meat industries in this, the unanticipated one is the US fashion for meat.

Of course, there has only been one US case of BSE and it was in an imported cow. The Americans have the benefit of what was learned both in the UK and continental Europe. And the United States Department of Agriculture generally has the kind of respect and trust of Americans that its European counterparts can only dream of.

In a more mundane context it has also to be recognized that the US is a net importer of cattle and beef. While it had a number of high profile niche markets for high quality barbecue style beef around the world, it imports quite a bit of beef on the hoof from Canada and Mexico and on the hook from Canada, New Zealand and Australia. The much publicized loss of exports markets, was largely offset by the less publicized loss of Canadian beef and cattle supplies since last spring following the import ban imposed after a Canadian case of BSE.

But it was still a surprise to most industry observers that Americans have gone on consuming beef as though nothing has happened.

The retrospective explanation of the unexpectedly robust demand for US meat is the Atkins diet. It is claimed that more than 30 million Americans are currently on this low carbohydrate diet. Losses for wheat farmers, potato growers and other carbohydrate producers have, it seems, been offset by gains by livestock producers as significant numbers of consumers have substituted beef for buns, pork for potatoes and poultry for paste.

Unfortunately the good news for livestock producers about the Atkins diet has to be tempered. The diet developed by Dr. Robert Atkins has been popular on and off since the early 1970's. The diet's current popularity it seems is the result of Dr. Atkins' death about a year ago. Also it is reputed to be effective as weight loss is rapid but is not considered as healthy as some other diets.

The implications of all this is that the current fad for the Atkins diet will not last for ever. And when it passes meat and livestock prices will suffer.

It is, however, a timely reminder that demand for any product from soft drinks or hard cheese is the result of the size of population, its income and its preferences. Population and income trends tend to be quite stable. Anything can happen to preferences - fads and fashion, at any time, without much warning and seemingly for no good reason as the Atkins diet has shown with so far positive results for the US livestock.

April 19, 2004