Meat & Livestock News

Stable Demand Underpins Strong Cattle Market Amid Supply Constraints

Cow Milk Industrial Automated Farm. Cows in the paddock with tags on the ears eat hay and rest

The cattle and beef markets are currently experiencing a surge in prices, propelled by diminishing supplies. Industry experts are closely monitoring beef demand, which has remained resilient despite various economic pressures.

Despite the industry’s concerns over consumer challenges, beef demand has been notably strong post-pandemic. In 2022, per capita beef consumption maintained its 2021 level at 58.9 pounds.

Retail prices for all-fresh beef, after adjusting for inflation, hit a record high in 2021 and remained robust in 2022. This performance is particularly striking compared to 2015 when consumption was 8.3% lower at 54.0 pounds, yet retail prices were comparable to the recent highs.

In 2023, retail prices for all-fresh beef have escalated further, with September recording a peak of $7.82 per pound. The July to September quarter saw a 6.6% year-over-year increase in average retail prices or a 4.0% rise when considering inflation.

The Choice boxed beef market has mirrored this trend, with prices since July 4th averaging $307.16 per hundredweight, peaking at $321.97. This represents an 18.4% hike compared to the previous year. With beef production anticipated to drop by over 5.5% year-over-year, a decrease in per capita beef consumption to 57.0 pounds is expected.

Market analysis reveals that high-value cuts such as tenderloin and ribeye have sustained their value throughout the year, with prices expected to rise seasonally into autumn. Conversely, popular summer grilling choices like strip loins, sirloin, and tri-tip have receded from their summer peak but are aligning with typical seasonal trends.

The data also indicates stability in the prices of wholesale chuck and round products during the first half of the year, with an upward trajectory in the latter half. This pattern reflects both the seasonal increase in demand for roasts as cooler weather approaches and the tightening of beef supplies.

Despite the looming macroeconomic and geopolitical uncertainties that may impact beef demand, the market is buoyed by the high quality of beef and consumer preferences. These elements, alongside the constricting beef supplies, are expected to continue bolstering wholesale and retail beef prices in the foreseeable future.