Attendees of the U.S. Meat Export Federation Spring Conference in Minneapolis, Minnesota, focused on several topics, including beef markets. Bernt Nelson, American Farm Bureau Federation Economist, provided a beef market outlook during the event.
Nelson; “We’ve been talking about drought conditions and a lot of things changing in beef supplies and the last year and where prices are headed. We know drought has caused a lot of supplies to get tighter along with high input costs and inflation happening. So, all those things combining, beef prices are headed higher. And while this is happening, we have to remember that the farmer hasn’t had a lot of time to recoup a lot of this through these better pricing situations. And a lot of them farmers have a burn rate. And so, we’ve eaten into some of that equity and we’re going to see some guys struggle with that. And that’s one of the reasons we’ll continue to see some liquidation in the cattle industry for a little bit.”
For consumers, for now, that means more supply now, less later. Nelson; “Exactly, and that’s kind of what we mean by saying markets becoming current. So, when these supplies really get into the market system, when we get into cold storage and what we have as that dwindles, we’re going to see prices start to hike eventually. And we’ve seen recent times where the Consumer Price Index, beef has actually been one of the few products that has decreased in prices. And through COVID, we had that one big spike in beef prices, but other than that they’ve been relatively consistent. So, as the spikes it’s going to start to affect the consumer as we think about the potential for a looming recession. And what that means for the money that they’re willing to spend on food and they may begin to look for substitutes.”
Story provided by NAFB News Service and Brian Winnekins, WRDN, Durand, Wisconsin