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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.

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Speaker 2: All Right, we're just two days out from Thanksgiving, but

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Speaker 2: forget the turkey because Americans can't get enough of beef.

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Speaker 2: The US is the world's largest consumer of red meat,

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Speaker 2: but inflation, tariff pressures, and shrinking cattle herds have sent

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Speaker 2: prices soaring. Despite this, though, our next guest says that

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Speaker 2: American demand for beef remains strong. I'm pleased to welcome

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Speaker 2: Nate Rempe. He is the CEO of Omaha Steaks. Nate,

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Speaker 2: great to have you with us, and we just had

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Speaker 2: that chart up of beef prices. Talk us through what

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Speaker 2: you're seeing in your seat when it comes to the

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Speaker 2: cost of your steaks.

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Speaker 3: Yeah, I mean, the demand is really high and the

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Speaker 3: supply is low. So my business focuses a lot on

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Speaker 3: the power that we built over one hundred years to

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Speaker 3: leverage flash freezing where we can buy in the commodities market.

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Speaker 3: We see little breaks in the market, build that inventory

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Speaker 3: and then leverage you know, some of our supply chain,

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Speaker 3: leverage our processes and automations to hold our prices pretty static.

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Speaker 3: In fact, America is going to be I think pleasantly

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Speaker 3: surprised when they come to Omaha Steaks dot Com. They're

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Speaker 3: going to find that our premier gift package, that perfect

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Speaker 3: Gift is going to be eighty nine to ninety nine

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Speaker 3: again this year. And I told my teams internally, this

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Speaker 3: is one of the great moments for Omaha Steaks to

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Speaker 3: really step forward and shine and leverage and flex our

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Speaker 3: muscle that is, that vertical integration and that ability to

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Speaker 3: play that commodities market. But you know, watching the beef

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Speaker 3: market now has been just fascinating from my seat, seeing

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Speaker 3: what it's doing, particularly in grocery stores across the country.

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Speaker 2: Well, talking about the beef market more broadly outside of

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Speaker 2: just your business, I mean, when it comes to matching

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Speaker 2: supply and demand, how does the US necessarily boost supply

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Speaker 2: or is it just inevitable that you're going to have

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Speaker 2: to try a source beef from overseas.

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Speaker 3: Yeah, I think there's a lot to be learned about

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Speaker 3: the supply chain of beef in America. Only about thirteen

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Speaker 3: to fourteen percent of the total beef consumed in America

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Speaker 3: is imported, and of that percentage, about eighty percent is

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Speaker 3: lean trim that goes into ground beef. So in particular,

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Speaker 3: you know, portion steaks and roasts and that largely come

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Speaker 3: from the domestic supply. And you know, those percentages really

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Speaker 3: give you a sense for how important building the domestic

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Speaker 3: herd is to meeting the demand of America's desire for

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Speaker 3: red meat. And so, you know, imports are an important

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Speaker 3: part of the overall picture. But it's not the solve,

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Speaker 3: it's not the silver bullet to addressing the cost of

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Speaker 3: beef in America. Rebuilding that herd is the inevitable requirement

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Speaker 3: for bringing supply up. And that is not a fast process, Katie.

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Speaker 3: That's you know, that's a six to eight year process

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Speaker 3: to kind of get back to what would be considered

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Speaker 3: a surplus in the size of the herd.

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Speaker 1: I am carrious, though, Nate. How we do that? And

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Speaker 1: by how I mean is there a real push to

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Speaker 1: do that beyond just yourself, meaning a more coordinated push.

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Speaker 3: Yeah, it is a decision that ranchers and feelot owners make.

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Speaker 3: It's called heifer retention. It's an industry term that describes

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Speaker 3: a holding back the female animal to build the herd,

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Speaker 3: as opposed to sending it to market. Now, as you

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Speaker 3: might imagine, when demand is high, there's a lot of

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Speaker 3: motivation for ranchers and feedlot operators to send those female

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Speaker 3: animals to market and take advantage of the optimal live price.

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Speaker 3: But that comes at of cost. And over the last

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Speaker 3: number of years, because of the demand for beef, those

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Speaker 3: female animals have gone to market and have not calved,

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Speaker 3: and the end result is the lowest herd size in

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Speaker 3: seventy years. And so to change that is to make

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Speaker 3: that decision to hold that animal back to build the herd.

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Speaker 3: And we're seeing, you know, early signs of that. But

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Speaker 3: what's super interesting, guys, is that when you make that

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Speaker 3: heifer retention decision, it actually further exacerbates the size of

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Speaker 3: the herd because fewer animals are going to market. So

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Speaker 3: to say it's gonna get worse before it gets better.

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Speaker 1: Yeah, just real quickly, Nate, we only have about thirty

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Speaker 1: seconds here. But I am curious just about long term trends,

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Speaker 1: you know, so looking really further out and consumption trends

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Speaker 1: and consumption patterns. And I know we've seen oscillations where

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Speaker 1: you know, we all favor chicken for a while and

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Speaker 1: then it's beef, then it's pork, back and forth. How

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Speaker 1: do you sort of manage those swings?

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Speaker 3: Yeah, I mean you know, America trades down really in

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Speaker 3: any product set, and as it relates to beef and chicken,

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Speaker 3: you know, we're seeing some consumers opt for chicken, but

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Speaker 3: it's just not as satiable as a protein. It really

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Speaker 3: just doesn't deliver like beef doesn't. So we are seeing

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Speaker 3: some trade down kind of inside the product set of beef.

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Speaker 3: You know, those consumers that may have opted for the

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Speaker 3: Fla mignon are now exploring how amazing the top surloin

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Speaker 3: is or you know, a strip or a rabbi and exploring,

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Speaker 3: you know, up and down the category there and and

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Speaker 3: really pushing themselves to educate on where else they can

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Speaker 3: get their beef. All right, Nate michaelmas.

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Speaker 1: Steaks, all right, Nate, gotta leave it there. Nate Renby,

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Speaker 1: of course, the CEO of Omaha states