U.S. consumer demand for beef stayed strong in the first quarter, while supply pressures continue to prevail, according to Rabobank’s latest North American Agribusiness Review.

With the USDA all-fresh beef retail price reaching a record $7.89/pound in March, Q1 2024 ended up being the second highest for consumer demand in the last 30 years. March USDA comprehensive beef cutout value averaged $309/hundredweight, while fed steers were $187/cwt. Those marks produced demand highs not seen in more than 25 years, notes Rabobank analysts.

First quarter prices were up 7% to 11% from the year prior, while estimated per capita beef supplies held steady at 14.6 lbs.

Extreme winter weather in the new year led to a brief setback in feedyard weights, however feeding conditions have been favorable to cattle performance and declining costs of gain, incentivizing feedyards to add days on feed and weight to cattle. March steer carcass weights averaged 923 lbs, 24 lbs larger than 2023, and a new record for the month.

U.S. beef exports were down 3% in the first quarter, with Japan, South Korea and China seeing the largest year-over-year decline. Imports, on the other hand, increased 32% with Australia and Brazil leading that effort.

As for North America production, drought continues to put pressure on Canada’s cattle inventories. Beef cow inventories declined 84,000 head to 3.5 million, making it the nation’s smallest herd since 1989. Raobank analysts expect further reductions to feedyard inventories and cattle slaughter over the next few years.

Meanwhile Mexico has shifted its exports from beef to cattle into the United States. Through February 2024, cattle exports to the U.S. were up 10%, while beef exports were down 17%. Rabobank analysts anticipate stronger U.S. beef and cattle demand to support prices as buyers supplement declining domestic production with Mexico supplies.