Oklahoma's Latest Farm
And Ranch News
Wednesday, June 1, 2022
Derrell Peel Reports Ground Beef Demand Continues Strong
Weekly, Dr. Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, offers his economic analysis of the beef cattle industry. This analysis is a part of the weekly series known as the "Cow Calf Corner" published electronically. Today, Dr. Peel talks about the ground beef market.

Memorial Day is perhaps the biggest hamburger grilling day of the year, possibly rivaled by Independence Day. Ground beef demand has continued strong for the past twelve months after rising sharply in the second quarter of 2021. The ground beef market is large and complex with two major demand channels in retail grocery and foodservice. These market channels utilize different and largely separate supply chains that depend on a wide variety of lean and fat sources.

Fed steers and heifers produce significant amounts of fatty trimmings, which require additional pounds of lean product to make ground beef. For example, one pound of 50 percent lean trimmings, mixed with five pounds of 90 percent lean trimmings, will produce six pounds of 83.3 percent lean ground beef. While there are many ground beef formulations and many product mixes to achieve them, this 5:1 ratio of 90 percent lean to 50 percent lean trimmings is representative of the ground beef market. The figure above shows the wholesale price for this combination of 90s and 50s for the past several years. Strong demand for the past year has kept the wholesale price of ground beef near record levels, exceeded only by the brief spike that occurred in the initial stages of the pandemic in 2020 and a few months of reduced supply in 2014/2015.  

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