US beef prices to remain flat next year
Since 2017, an increased production of beef has been sustained by a growing demand on the US market and that will probably remain at the same level next year, according to analysts consulted by Drovers magazine.
"The cattle markets have performed remarkably well, all things considered, and beef demand has held really well. Since 2017, demand has kept up with increasing beef supplies. Demand, both foreign and domestic, has supported cattle prices even as we have seen increasing supplies of beef and competing meats
For 2019, I’m expecting prices to be sideways to slightly stronger. That presumes we will continue with the current beef demand, and, while I don’t think it’s outstanding, I think there is some profit potential there for cow-calf operators", explains Oklahoma State University Extension Livestock Economist Derrell Peel.
US beef production will increase by 2.8% to 3% for 2018, according to estimates. That means total supplies will near 12.25 million tonnes. Another 1.8% increase is projected next year by Sterling Marketing president John Nalivka.
"Demand has been excellent, and our growing beef exports continue to support prices and profitability. Beef exports increased 11.9% in 2018, and I project another 3.1% next year", says Nalivka.
Nevertheless, 2019 could represent the end of the current herd expansion cycle, according to another economist. "I believe that we’re at, or very near, the peak cycle cow number. I don’t see the economic driver for cow-calf producers to expand from here.
Projected prices are in the range of $164 to $174 for fall calves in 2019. Using that mid-range price of $169, that’s basically steady with 2018, and an increase in profitability would be found through lower production costs", believes Kansas State University extension economist Glynn Tonsor.
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