Export Market Becoming More Important for US Beef Industry, But Let's Not Forget Domestic DemandThu, 19 Oct 2017 12:27:34 CDT
Thus far in 2017, US beef exports have performed remarkably well. While that aspect of the business is absolutely crucial to the industry, domestic demand is also very important and can’t be forgotten. Radio Oklahoma Ag Network Farm Director Ron Hays caught up with Oklahoma State University Extension Livestock Market Economist Dr. Derrell Peel to find out where we stand in regards to domestic beef demand right now, and what value it brings to the table for producers.
“We look at retail prices and they’ve held up very well relative to the other meats,” Peel said. “Overall, retail prices are holding up very close to year-ago levels - and this is in the face of a 4.5 percent increase in beef production.”
All in all, when you combine this year’s export strength with the current domestic situation, Peel says beef demand is quite robust. Unfortunately, when things get too good, people start to wonder how long it will be until the situation reverses in the opposite direction. In Peel’s mind, the industry is still coming off of some abnormal years, and a trend being noted across all major meat sectors, is a growth in production. And as most people are holding their breath expecting some challenges to arise, Peel says 2017 has really proven that beef demand can go a long way in partially, even mostly offsetting increased supply pressure that is currently being seen in the industry. At this point he sees no real reason to think this situation won’t continue into 2018. He supports this notion with his predictions for the upcoming Cattle on Feed report due out on Friday from the USDA - with the disclaimer that there is always room for surprises.
“I think in general we’re looking for kind of a continuation of what we’ve seen,” he said. “I think there will be significant placements. We know there’s more cattle out there and that’s not really a surprise. But, given the strength we’ve seen in these feeder cattle markets in the last few weeks - certainly it is consistent with the idea that feedlots have continued to aggressively place cattle. That is what has helped us for so many months now.”
Listen to Peel and Hays discuss the importance of domestic beef demand and its value to producers, as well as Peel’s predictions for the upcoming Cattle on Feed report, on today’s Beef Buzz.
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.
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