Beef, It’s Looking Up
For those involved in the beef industry, the last few days have been somewhat positive. These days we’ll take any positives and sit up a little taller in the saddle.
Of course, the big news is the rain most of us have received lately in our region, and our favorite weatherman, Don Day, says more is on the way. We’ll take it.
As of May 31, the Casper area has received seven inches of precipitation for the year. Over Memorial Day weekend, I’ve been holding rain dances, weather permitting.
While the cost of inputs and inflation are really hurting us, lamb and beef demand is high and predicted to go higher. Hopefully this will mean more dollars to the feeders and producers.
The U.S. Meat Export Federation (USMEF) held their spring conference last week, the first in-person conference since 2019. Those attending were from the U.S., Asia, Mexico, Central and South America, Africa, the Caribbean countries and Europe.
USMEF President and CEO Dan Halstrom said, “To date, demand for U.S. red meat has been as strong as I’ve seen in all my years in the meat business, and remarkably resilient. But the question in my mind is, at what point do these inflationary pressures start to constrict disposable income for the global consumer? At what point will we see a crack in demand?”
The good news is he thinks the new foodservice and retail trends which exploded during the pandemic are likely here to stay. One speaker, author and consultant, Peter Zeinan, projected food insecurity will rise around the globe and said conditions are ripe for regional famines.
He continued to say, “While American farmers and ranchers face sharply higher input costs, their production and supply chain challenges are not as drastic as in many other regions of the world.”
So, despite significant obstacles, he emphasized U.S. agriculture is well positioned for robust growth over the next 10 to 12 years.
I was reading an article from Progressive Farmer, DTN saying the three bullish factors continuing to bode well for the feeder cattle market are beef cow slaughter, supply/demand mechanics and U.S. beef exports. A large minus for feeder cattle are the high grain prices.
As the article read, we have to realize 2021 was a record year for beef cow slaughter. Out of the 52-week calendar year, there were 18 weeks in 2021 when beef cow slaughter exceeded 70,000 head, which is incredibly unusual.
But in 2022, there has only been one week when beef cow slaughter hasn’t exceeded 70,000 head. This was partially brought on by the drought. Fewer beef cows means demand for these cattle should strengthen, which should send prices higher too.
This past week at cattle auctions, cows were bringing upper $80 and bulls around $115 per hundred weight. These are prices we haven’t seen for some time.
The U.S. beef exports in 2021 were great and so far in 2022, exports have risen by over seven percent. This year-over-year growth in beef exports is a strong supportive factor in our U.S. beef cattle market.
In these times, it is great to read on positive overtones, and it is a great time to head to Cheyenne June 8-11 for the Wyoming Stock Growers Association 150th Anniversary Celebration and summer convention.