Beef Buzz News
K-State's Glynn Tonsor Worried Domestic Beef Demand Is Going In The Wrong Direction
Wed, 17 Jun 2020 10:40:35 CDT
Dr. Glynn Tonsor, Kansas State University Extension livestock market economist, is worried that beef demand has dropped to recession-era levels. Tonsor, a well-respected expert on beef demand issues, examined the latest demand numbers and offered this summary for today's Beef Buzz.
Domestic beef demand for April (latest month for available data) was down 17 percent compared to year ago levels, Tonsor said. This is parallel to what we saw in the great recession in 2008-09, he said.
In August of 2008 beef demand was down 16 percent, so it doesn't surprise me in what we found in the April numbers, Tonsor said.
Tonsor said consumers tend to weaken beef demand when macroeconomic activity declines.
The K-State economist said current market realities indicate we will have problems the rest of the summer.
The supply support for higher wholesale prices is not where it was a month ago, so it leads to lower cutout prices, Tonsor said.
"I also think there are growing concerns beef demand is weaker which in the past had been hidden by tighter supplies, and that's worrisome for the rest of the summer."
A little sliver of good is on the export front where we have seen a smaller demand drop than domestically.
Maybe this summer will be better, and we will turn the tide so there are reasons to be cautiously optimistic, Tonsor said.
The K-State economist said fed cattle prices are projected to improve through the rest of this year as the basis will shrink and stabilize.
There is some hope the feedlot sector has managed to depress feeder cattle prices enough to get us closer to projected break-even prices, Tonsor said.
To learn more about Tonsor's meat demand studies, go to the dedicated website by clicking here.
Click on the LISTEN BAR below to hear more comments from Dr. Glynn Tonsor.
The Beef buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
Ron Hays Beef Buzzes With Glynn Tonsor
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