Record beef production may bring lower prices
Cattle numbers for the national beef herd were released in January and the report revealed that we have the most cows in the U.S. since 2009. Heifers, which are young females, are still being retained, and that means the herd will continue to grow. David Anderson is a Professor and Texas A&M Agrilife Extension Economist.
“We’re going to have record beef production. The most beef production in a year ever. We’re going to have record meat production. If we put together beef, pork, chicken, turkey, all of it together, we’re going to produce over one hundred billion pounds of meat. And that’s a lot of meat.”
Anderson says the beef industry is hoping consumers buy more.
“So that’s sort of that underlying backdrop that there’s going to be a lot of meat to buy. The consumer is going to have a lot of choices. And so when we’re supplying more, record beef production in this case, odds are that prices decline, even with good demand, more supplies likely mean lower prices.”
Anderson says that the national beef cow herd continues to grow, not as fast as last year, but still growing.
“More cows mean more calves. When we sell those calves in the fall that means there are going to be more for sale, against this backdrop of growing beef supplies. So I think prices are going down. I think it makes a lot of just common sense that we’re going to see lower prices. Are we going to see prices as low in the fall as we say in 2016? No I don’t think so because of the demand growth that we’ve had.”
But Anderson points out that the industry asking consumers to keep buying at the pace that they’ve been buying is asking a lot.
“We’re hoping that grocery stores feature rib eyes again like they did last year, that they feature these steaks, that we continue to see a growing level of consumer confidence.”