Derrell Peel Shares the Latest Industry Data Showing Beef Demand Holding Strong So Far in 2018Mon, 16 Apr 2018 14:33:59 CDT
Mondays, 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 by Dr. Peel and Dr. Glenn Selk. Today, Dr. Peel backs up his claims that the beef industry is holding up strong so far this year, with the latest available data.
"In the face of growing beef production, all eyes are on beef demand in 2018. Beef production is up about 1.5 percent so far this year but total production is projected to increase roughly five percent year over year by the end of the year.
"Choice retail beef prices in March were $5.871/lb., up from $5.828/lb. in February but down 0.6 percent from one year ago. The All Fresh beef retail price for March was $5.598/lb., up from $5.53/lb. in February and up 0.9 percent from one year ago. Choice boxed beef cutout has declined from a February high of $224.46/cwt. to $213.34/cwt. in mid-April but remains 1.6 percent higher year over year for the latest weekly data.
"In the last four weeks, higher primal values for the rib, chuck, brisket, short plate and flank have been partially offset by lower loin and round values. Brisket values are especially strong, with wholesale value up over 30 percent year over year, while Ribeye values are down some from earlier highs but still up six percent from last year in the last four weeks. Higher chuck values are led by strong Flat Iron steak and Chuck Roll prices, up roughly 28 percent from one year ago. Short Ribs are also up about 27 percent, likely supported by strong export demand.
"Lower loin values are a short term concern and a continuation of a longer term trend of weaker relative loin values. Loin values have declined relative to other parts of the carcass over the last decade. Currently wholesale values for Tenderloin are down about 11 percent year over year while Loin Strip prices are roughly 7 percent lower than one year ago.
"Retail beef prices continue to hold up well relative to pork and poultry pries. March retail pork price was $1.502/lb., up from $1.478/lb. in February and down 0.7 percent from one year ago. Composite broiler retail price in March was $1.867/lb., up slightly from the February level of $1.861/lb. and down 0.6 percent from last year. The ratio of retail beef price to both pork and broiler continues to hold strong despite growing supplies of beef, pork and poultry. Production of beef, pork and broilers are all expected to be record large in 2018 leading to record large total meat supplies of nearly 103 billion pounds, up 3.3 percent year over year. This includes other chicken, turkey, lamb and mutton and veal production.
"Net meat exports are projected to move just over 12 percent of total meat production offshore this year and hold per capita domestic meat consumption to 219.4 pounds, retail weight. This level is 1.3 higher than last year and the highest total meat consumption since 2007 but below the record level of 221.9 pounds in 2004. Strong domestic and international meat demand will be critical to minimize the supply pressure on meat prices in 2018."
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