Despite High Beef Prices, Demand Appears To Be Holding
Tyler Cozzins, agricultural economist at the Livestock Marketing Information Center, said despite the high beef prices, demand appears to be holding steady. He noted for the month of June, retail beef prices were $7.66 per pound, up 20 cents per pound from last year. He added the record beef price actually occurred in October 2021 at $7.90 per pound. Cozzins added he expects July prices to remain high based on wholesale prices from the past month.
And, in the face of inflation and slowing of herd rebuilding efforts, beef prices remain elevated and domestic beef demand holds strong.
"This inflationary environment that we're living in, coupled with a slowing in current rebuilding efforts, keep the prices elevated, but domestic demand is still holding strong in the face of those challenges. It’s just, what's the tipping point here? I think we would have expected that to occur a little bit sooner, but consumers still seem to be buying their beef, I think they liked consuming that at home and they learned how to cook it.”
He went on to say demand for exports of beef are a key piece of the demand picture.
“Through those first five months of this year, beef exports totaled nearly 1.5 billion pounds. Now that's a record pace for the first five months in a year. It is also a six percent increase from the same period last year. What this means is about ten percent of U.S. beef production is destined for these export markets. So, I think that's important key, is just the pace that we're shipping this and the amount.”
Overall, Cozzins the beef demand picture is looking positive, but the inflation environment that the U.S. and global economies are facing could prove to be a headwind in the near future. At this same time, he added, availability indicates beef demand is holding strong for U.S. beef, which is a positive sign for the industry.
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