US beef demand remains robust - CoBank
Consumer preferences changing though
23 October 2024
2 minute read
By: Beef demand remained robust through the grilling season, according to a recent market report from CoBank. However, consumers (who were previously seeking out pricey loin cuts) instead found ample retail hamburger promotions just as their pocketbooks were feeling the impact of inflation. Still, everyday retail beef prices continued rising to new highs through August, topping more than $8.60/lb. So too, at the wholesale level, prices for 90% lean beef trim were record high, averaging $3.80/lb., a 25% premium vs. 2023. Both domestic and imports supplies of this major component to ground beef have been tight.
Despite fears of tighter cattle supplies, cattle on feed numbers reported by USDA were up 1% YoY in each of the last three reports. So, what’s keeping more cattle on feed? Heifer retention has yet to emerge, cattle imports from Mexico are up 23% YoY, and days on feed are being extended with higher cattle values and lower corn prices.
Cheaper feed conversion and expectation of tighter calf supplies ahead is contributing to more high-quality beef production than was initially anticipated for the current period, and we expect this trend to continue in the near-term.
The composition of beef coming to market in 2024 has been more fed cattle, with more steers in the mix of cattle entering the feedlots than was the case last year. Falling feed prices, a changing mix of cattle and tighter availability is contributing to higher cattle weights. Fed steer weights have been eclipsing 940 pounds in recent weeks, up more than 20 pounds YoY. For January-August, US beef production was down just 0.5% YoY.
