53 Percent Increase Retail Beef Prices Usda
National Cattlemen Beef Clan
The beef cattle industry is bouncing dorsum from the pandemic, and connected progress is expected in 2022. Beefiness prices are near record loftier, and consumer and wholesale beef need are both at thirty-year highs as the U.S. and global economy recover. While drought remains a significant concern with weather threatening pasture weather in the Northern Plains and Due west, stiff demand, combined with higher cattle prices, signal an optimistic futurity for the beef industry, according to CattleFax. The popular CattleFax Outlook Seminar, held as part of the 2021 Cattle Industry Convention and NCBA Trade Show in Nashville, shared adept market and weather analysis today.
According to CattleFax CEO Randy Blach, the cattle market place is notwithstanding dealing with a burdensome supply of market-fix fed cattle. The influence of that supply will diminish as three years of herd liquidation will reduce feedyard placements. As this occurs, the value of calves, feeder cattle and fed cattle volition increase several hundred dollars per head over the next few years.
Kevin Good, vice president of industry relations and analysis at CattleFax, reported that the about recent cattle cycle saw cattle inventories peak at 94.8 million head and that those numbers are nonetheless in the system due to the COVID-xix induced slowdown in harvest over the past year.
"As drought, market place volatility and processing capacity challenges unnerved producers over the past 24 months, the industry is liquidating the beef cowherd which is expected to decline 400,000 caput by Jan. ane reaching 30.7 million head," Good said.
The feeder cattle and dogie supply will decline roughly 1 million caput from its tiptop during this contraction phase. Fed cattle slaughter will remain larger through 2021 as carryover from pandemic disruptions works through a processing segment hindered by labor issues, he added.
"While fed cattle slaughter nearly equals 2019 highs at 26.v million head this year, we look a 500,000-head decline in 2022," Proficient said. "This, combined with plans for new packing plants and expansions perchance calculation nigh 25,000 head per week of slaughter capacity over the side by side few years, should restore leverage back to the producer."
Good forecasted the average 2022 fed steer price at $135/cwt., upwards $14/cwt. from 2021, with a range of $120 to $150/cwt. throughout the twelvemonth. All cattle classes are expected to trade higher, and prices are expected to better over the next three years. The 800-lb. steer price is expected to average $165/cwt. with a range of $150 to $180/cwt., and the 550-lb. steer cost is expected to average $200/cwt., with a range of $170 to $230/cwt. Finally, Good forecasted utility cows at an average of $70/cwt. with a range of $60 to $80/cwt., and bred cows at an average of $1,750/cwt. with a range of $1,600 to $1,900 for load lots of quality, running-age cows.
Consumer demand for beef at dwelling and around the globe remained strong in 2021, a trend that volition continue in 2022, particularly every bit tight global poly peptide supplies are expected to fuel U.S. export growth.
Aftershocks from the pandemic continue to keep domestic demand at elevated levels not seen since 1988. Government stimulus and unemployment benefits are fueling the economic system with demand outpacing available supplies as restaurants and entertainment segments emerge from shutdowns.
Co-ordinate to Good, the boxed beefiness cutout peaked at $336/cwt. in June, while retail beef prices pushed to annual high at $7.eleven/lb. "Customer traffic remained stiff at restaurants and retail – even every bit those segments pushed on the higher costs, proving consumers are willing to pay more than for beef," he said.
Wholesale demand will be softer in 2022, equally a bigger decline in beefiness supplies will get-go a smaller increase in beefiness prices with the cutout expected to increase $5 to $265/cwt. Retailers and restaurants continue to accommodate prices higher to cover costs. Good added the retail beef prices are expected to boilerplate $6.80/lb. in 2021 and increase to $6.85/lb. in 2022.
Global protein need has increased and U.S. beef exports take posted new record highs for two consecutive months, fifty-fifty with high wholesale prices. The increases were led by large, twelvemonth-over-year gains into China, and Japan and Republic of korea remaining strong merchandise partners for protein. "The tightening of global protein supplies will support stronger U.S. carmine meat exports in 2022. U.South. beef exports are expected to grow 15 percent in 2021 and another 5 pct in 2022," Good said.
Mike Murphy, CattleFax vice president of enquiry and run a risk management services, expects summer weather patterns – and their touch on corn and soybean yields – to be the focus of marketplace participants.
"Equally People's republic of china rebuilds its pork industry following their battle with African Swine Fever, they are looking for college quality feed ingredients, such as corn and soybeans" Murphy said "Exceptional need from Prc is leading U.S. corn exports to a new record in the current market year, and strong demand for U.S. soybeans has elevated prices in the terminal 12 months."
Spot prices for soybeans are expected to be $thirteen to $16 per bushel for the remainder of the adjacent xviii months along with spot corn futures to trade between $4.75 to $6.25 per bushel in the aforementioned time frame.
Murphy noted that drier weather in the Northern Plains and West will pressure hay production and quality in the 2021 flavor – supporting prices into the adjacent year. "May 1 on-farm hay stocks were down 12 percent from the previous year, at eighteen million tons. The USDA estimates hay acres are down 700,000 from concluding yr at 51.five million acres. So, expect current year hay prices to boilerplate near $170/ton, and 2022 average prices should exist steady to $10 higher due to tighter supplies and stronger demand," he said.
All session panelists agreed that weather is a major factor impacting the beef manufacture, and agriculture as a whole in 2021 and going into 2022. A forecasted return of La Niña this fall would pb to intensifying drought for the West and Plains into early 2022, according to Dr. Art Douglas, professor emeritus at Creighton University. Douglas indicated that the precipitation outlook in the fall of 2021 going into the early on part of 2022 could see drought push harder in the Pacific Northwest with higher up-normal precipitation beyond the inter-mountain West – leaving the Midwest drier, and less tropical storm activeness to reduce Southeast rainfall into late fall. As well, the western half of the country will be drier into early on leap with a returning La Nina.
Blach ended the session with an overall positive outlook, expecting margins to amend as cattle supply tightens and producers proceeds leverage back from packers and retailers, beefiness demand to remain solid with expected consign growth, and utilization and packing capacity to improve over the next few years. He also noted that the economy has made gains in 2021 and should stay stronger with low interest rates and government stimulus fueling consumer spending.
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Source: https://naturalresourcereport.com/2021/08/beef-to-hit-record-breaking-prices-demand/
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