Beef Demand Situation Looks Good by the Data, But Outside Threats Could Hinder Future SuccessTue, 30 Oct 2018 10:07:38 CDT
Several indications in the marketplace have been pointing to better beef demand thus far here in 2018. For example, many US customers on the international market have bought record levels of total beef pounds and at a higher value. Domestically, the exact numbers are a bit harder to pin down but seem to be doing well also. The numbers in the latest Cold Storage report, according to Extension Economist with Kansas State University Glynn Tonsor, are very encouraging.
“On the beef side, numbers are up 1% from the prior month and up 3% from the prior year. That’s not surprising given the production values we have going on,” Tonsor said. “To me, the fact those aren’t up five to ten percent is the relevant point. So, I’d say that’s good - that’s consistent with ongoing movement. I would summarize the beef numbers as an example that we are still moving product despite the fact that we’re producing a lot. Indirectly, that’s confirmation of a good demand situation.”
Despite the positive numbers coming out in these reports - Tonsor says there may be reason for concern in other areas outside of the beef market. Tonsor suggests the stock market and the recent volatility that has been observed is significant, given the implications. Although he is not to the point of raising any alarms, Tonsor does say that it is worth keeping an eye on in the event that any more cause for concern is raised.
“There is a host of grey clouds on the horizon that have people concerned. Discussions about increasing interest rates and the full impact of tariffs on our economy. Those types of things are underscoring volatility in the stock market and some of the uncertainty we’ve seen in markets is worth noting,” he said. “The 2008-2010 period - The Great Recession here in the US - was not a good period for meat demand and this week should give us some caution to think about that again.”
Listen to Tonsor’s full analysis of the beef demand situation and what factors could threaten it in the near future, with Radio Oklahoma Ag Network Farm Director Ron Hays, 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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