Feuz projects beef as steady through 2017
Casper – Beef projections should be holding steady through 2017, barring any unpredicted events, according to Bridger Feuz, UW Extension livestock marketing specialist.
“If supply continues along the projections and demand holds steady, fundamentals support record prices again next fall,” stated Feuz during the 2014 Progressive Rancher Forum held on Dec. 1.
Although trends suggest that Americans are consuming less beef per person than in the past, consumers are willing to spend more money per pound.
Americans are also consuming a higher quality beef.
“Beef is at a record high in terms of prices right now, in the grocery store and at the meat counter,” said Feuz.
Feuz noted that last year, Wyoming had the smallest calf crop since the 1950s, and carcass weight has leveled out somewhat.
He also said that some of the statistics can be misleading.
“Looking at statistics for heifers held back as replacements, there appears to be steady growth on Jan. 1. It looks like we are starting to build the industry,” Feuz said.
“But, if we look at the July 1 numbers, we have changed when we’re marketing those heifers,” he continued. “We kept them in January, but we are selling them before July.”
Cattle on feed numbers are down, and cow slaughter has been steady.
Marketing and demand
Marketing continues to be important for the industry, Feuz added.
Beef demand declined in the early 1990s, but improved in the middle of the decade.
“The beef industry took the bull by the horns, so to speak,” Feuz explained. “There was a lot of pressure to do a beef quality audit and to really change things in terms of quality of product and in consistency of product.”
He continued, “There was also a big push in terms of our marketing, and that made a difference.”
“Beef has built up demand again through 2004,” Feuz said.
Negative media has a big effect on demand. The industry needs to be diligent about keeping a positive marketing message, he noted.
Internationally, there have also been improvements since thebovine spongiform encephalopathy (BSE) scare in 2003.
Exports to Japan are back to pre-BSE levels, and trade is going well with South Korea, Canada and Mexico.
In 2013, the U.S. was, unusually, a net exporter of beef. In 2014, the U.S. returned to its status as a net importer of beef, yet the industry has retained profitability. Both the export of variety meats and high hide prices were contributing factors.
“Even though the U.S. is bringing in more pounds of beef, the beef we bring in is of lower value to us than the beef we export. If we look at the last numbers, we were at a $2.8 billion surplus in terms of what we export out versus what we bring in,” commented Feuz.
In looking at competing markets, pork production is increasing, and lamb is fluctuating.
Broilers are on a steady increase. Poultry has projected an aggressive expansion plan, looking to continue growth in production.
Although beef supply is down, demand remains high, and Feuz remains optimistic about the outlook for the cattle industry.
“Beef is a good product, which is one of the reasons the industry is able to have a low supply with a high price that really drives the market,” he said.
Natasha Wheeler is assistant editor at the Wyoming Livestock Roundup and can be reached at Natasha@wylr.net.