Although beef consumption is declining due to tightening supplies, the fact is consumers are paying more for available supplies than they would if true demand weren’t increasing. Through the third quarter, the All Fresh Beef Demand Index increased 16 of the last 17 quarters year-over-year, according to Glynn Tonsor, agricultural economist at Kansas State University.
Dwindling supplies of yearling cattle commanded steady to firm prices this week. Calves in the Southern Plains and Southeast sold steady to $5 higher, bolstered by demand for calves to graze wheat pasture.
The seasonal increase in auction receipts, increased percentage of freshly weaned calves and farmer-feeders returning to harvest added pressure to calf prices. Cash fed cattle trade, on the other hand, was at a record $170/cwt.
U.S. beef exports continue to climb on a value basis, although higher prices wrought by tight supplies are beginning to dampen the volume of trade. On the other side of the equation, U.S. beef imports are increasing by necessity.
The prospects for herd expansion for much of the rest of the decade suggest that cattle prices are likely to grind higher yet from current record levels before peaking and working lower toward the end of the decade.