Chapter 1: What is the main topic discussed in this episode?
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All right, we're just two days out from Thanksgiving, but forget the turkey because Americans can't get enough of beef. The U.S. 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 Remain 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 100 years to leverage flash freezing where we can buy in the commodities market when we see little breaks in the market. build that inventory, and then leverage 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 omahasteaks.com. They're going to find that our premier gift package, that perfect gift, is going to be $89.99 again this year. And I told my teams internally, this is one of the
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 for my seat, seeing what it's doing, particularly in grocery stores across the country.
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Chapter 2: What factors are driving beef prices up in the U.S.?
It's called heifer retention. It's an industry term that describes 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 a 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 70 years. And so to change that is to make that decision to hold that animal back to build the herd. And we're seeing 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 going to get worse before it gets better.
Yeah. Just real quickly, Nate, we only have about 30 seconds here, but I am curious just about long-term trends, you know, sort of 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, 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 does. And 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 filet mignon are now exploring how amazing the top sirloin is. or a strip or a ribeye, and exploring up and down the category there and really pushing themselves to educate on where else they can get their beef. Like Omaha Steaks.
All right, Nate, got to leave it there. Nate Rempe, of course, the CEO of Omaha Steaks.
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