The COVID-19 pandemic delivered significant disruptions to the beef industry, with slowdowns and shutdowns at meatpacking plants and foodservice. But domestic consumption stayed the same or increased slightly compared to 2019.
The retail fresh beef index was high in 2020, Joel Packham, University of Idaho Extension educator for Cassia County, said during the university’s Ag Outlook Seminar.
There was a little bit of fear, and people wanted beef in their freezers, he said.
The retail fresh beef index rose 10 points year over year, according to the Livestock Marketing Information Center.
Wholesale beef demand went off the charts during May and June, he said.
“People were after wholesale beef in a way like never before,” he said.
CattleFax projects beef demand at retail went from 40.6% of combined retail and foodservice demand to 50%.
USDA’s all fresh retail beef price was sky high in May, June and July, he said.
That price reached a peak of $7.40 a pound, and the annual forecast for 2020 is $6.35 a pound. The all fresh retail beef price ranged from $5.70 a pound to just under $6 in 2019.
Total meat sale tonnage at retail was up 9% January through October, and dollar sales at retail were up 18% or $11.5 billion. Beef’s share of the increased spending was 43.5% or $5 billion, he said.
“People were willing to spend more on groceries, and they were really willing to spend it on beef,” he said.
As for beef exports, they were forecast to be down 4.5% in 2020 but were up 10% in 2021 with a continuing upward trend. The largest U.S. customers are Japan, South Korea, Mexico and China, and the industry is looking for China to become a bigger player, he said.
Export markets aren’t looking for hamburger, they’re after choice grade beef or higher, he said.
“They’re really enthralled with grain-fed, really high-quality beef from the U.S.,” he said.
And quality grade has improved for U.S. beef. From 2009 to 2014, the percent choice and higher was at 70% to 73%. Now it’s about 86% to 87%, and producers and breed associations need to be patted on the back, he said.
“Those people have put beef on the board,” he said.
On the supply side, the national cattle herd is moving downward. Higher carcass weights are keeping production up, but cow numbers will get to the point where production will drop off, he said.
With cattle numbers dropping and strong exports, the 2021 price outlook for cattle appears on the rise, he said.
CattleFax projects fed steer prices at $115 a hundredweight, compared to $110 in 2020. The average price for 800-pound feeder steers is projected at $145, compared to $133 in 2020. The average price for 500-pound steer calves is projected at $168, up from $160 in 2020.
Bred cow prices are projected up slightly to $1,600 a head. Cull cow prices are expected to average $64 a hundredweight, up from $62 in 2020.
Cow-calf returns are projected positive after being negative for most producers the last couple of years, he said.
The Link LonkDecember 29, 2020 at 12:15AM
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