From the Ground Up - Beef Supply and Demand

If you had been on campus this week, you would have probably noticed a few more pickup trucks and folks sporting cowboy hats, boots, and jeans.

That’s because Texas Agrilife Extension and Texas A&M’s Animal Science Department was hosting the 59th Annual Beef Short Course. Attendees from all over the United States and all over the world were encouraged to hear many say the beef industry has a bright future. Business and market researcher Don Close agrees.

“Fortunately, the weather conditions that we have seen, both regionally to a degree, but across the U.S., vastly improved from what we had in the drought pressure of 2011-2012, so we’re starting to see a lot of renewed interest in producers of, OK, I’ve got forages that are recovering and developing that I do have the resources to expand.”

Close works for Rabobank, a multi-national banking and financial services company.

“If weather conditions stay bad, and we continue to contract numbers, obviously the U.S industry’s going to get smaller, and the decline in per capita consumption will accelerate. If we do expand it will be a three to five year reduction in beef supplies as we retain those additional females, but then for then the longer term, we’ll start to see a recovery in total beef production.”

In the last thirty-five years, domestic per capita consumption of beef has declined from over one hundred pounds annually to around fifty five pounds.

“We’ve seen a substantial change in consumer behavior. Chicken and total poultry consumption has escalated, so those two products have absolutely inverted.”

Price hasn’t been the only reason.

“Largely in price, largely due to convenience, and partially due to changing consumer tastes and preferences.”

But Close remains bullish on the beef industry.

“If you look at the developing life styles in so much of the world, and the growth in China, I think the opportunity for added demand for protein worldwide will have a very positive growth for a long time to come.”