Bloomberg Audio Studios, Podcasts, radio news.
All Right, we're just two days out from Thanksgiving, but forget the turkey because Americans can't get enough of beef. The US is the world's largest consumer of red meat, but inflation, tariff pressures, and shrinking cattle herds have sent prices soaring. Despite this, though, our next guest says that American demand for beef remains strong. I'm pleased to welcome Nate Rempe. He is the CEO of Omaha Steaks. Nate, great to have you with us, and we just had
that chart up of beef prices. Talk us through what you're seeing in your seat when it comes to the cost of your steaks.
Yeah, I mean, the demand is really high and the supply is low. So my business focuses a lot on the power that we built over one hundred years to leverage flash freezing where we can buy in the commodities market. We see little breaks in the market, build that inventory and then leverage you know, some of our supply chain, leverage our processes and automations to hold our prices pretty static. In fact, America is going to be I think pleasantly
surprised when they come to Omaha Steaks dot Com. They're going to find that our premier gift package, that perfect Gift is going to be eighty nine to ninety nine again this year. And I told my teams internally, this is one of the great moments for Omaha Steaks to really step forward and shine and leverage and flex our muscle that is, that vertical integration and that ability to
play that commodities market. But you know, watching the beef market now has been just fascinating from my seat, seeing what it's doing, particularly in grocery stores across the country.
Well, talking about the beef market more broadly outside of just your business, I mean, when it comes to matching supply and demand, how does the US necessarily boost supply or is it just inevitable that you're going to have to try a source beef from overseas.
Yeah, I think there's a lot to be learned about the supply chain of beef in America. Only about thirteen to fourteen percent of the total beef consumed in America is imported, and of that percentage, about eighty percent is lean trim that goes into ground beef. So in particular, you know, portion steaks and roasts and that largely come
from the domestic supply. And you know, those percentages really give you a sense for how important building the domestic herd is to meeting the demand of America's desire for red meat. And so, you know, imports are an important part of the overall picture. But it's not the solve, it's not the silver bullet to addressing the cost of beef in America. Rebuilding that herd is the inevitable requirement for bringing supply up. And that is not a fast process, Katie.
That's you know, that's a six to eight year process to kind of get back to what would be considered a surplus in the size of the herd.
I am carrious, though, Nate. How we do that? And by how I mean is there a real push to do that beyond just yourself, meaning a more coordinated push.
Yeah, it is a decision that ranchers and feelot owners make. It's called heifer retention. It's an industry term that describes a holding back the female animal to build the herd, as opposed to sending it to market. Now, as you might imagine, when demand is high, there's a lot of motivation for ranchers and feedlot operators to send those female animals to market and take advantage of the optimal live price.
But that comes at of cost. And over the last number of years, because of the demand for beef, those female animals have gone to market and have not calved, and the end result is the lowest herd size in seventy years. And so to change that is to make that decision to hold that animal back to build the herd. And we're seeing, you know, early signs of that. But what's super interesting, guys, is that when you make that heifer retention decision, it actually further exacerbates the size of
the herd because fewer animals are going to market. So to say it's gonna get worse before it gets better.
Yeah, just real quickly, Nate, we only have about thirty seconds here. But I am curious just about long term trends, you know, so looking really further out and consumption trends and consumption patterns. And I know we've seen oscillations where you know, we all favor chicken for a while and then it's beef, then it's pork, back and forth. How do you sort of manage those swings?
Yeah, I mean you know, America trades down really in any product set, and as it relates to beef and chicken, you know, we're seeing some consumers opt for chicken, but it's just not as satiable as a protein. It really just doesn't deliver like beef doesn't. So we are seeing some trade down kind of inside the product set of beef.
You know, those consumers that may have opted for the Fla mignon are now exploring how amazing the top surloin is or you know, a strip or a rabbi and exploring, you know, up and down the category there and and really pushing themselves to educate on where else they can get their beef. All right, Nate michaelmas.
Steaks, all right, Nate, gotta leave it there. Nate Renby, of course, the CEO of Omaha states