Beef market strong, says UW official during local event

University of Wyoming Extension Office educator Bridger Feuz talks about the livestock market outlook during WY/UT Ag Days, held Monday-Tuesday, Jan. 27-28, at the Roundhouse in Evanston. Feuz, one of the two keynote speakers for the annual event, said the beef market is strong and steady. (HERALD PHOTO/Kayne Pyatt)

EVANSTON — University of Wyoming Agricultural Extension, in cooperation with Utah State University Extension, held its 2020 WY/UT Ag Days at the Roundhouse in Evanston on Monday and Tuesday, Jan. 27-28.

Ranchers and livestock producers from the surrounding area attended the series of 16 workshops. Workshops were open and divided into two tracks of choices. Topics of workshops included: culling livestock, cattle and sheep feed and minerals, the wild horse issue, hemp 101 and its feed value, different forms of business ownership, small flock production, using social media and drone use in agriculture.

Keynote speakers during lunch were Mary Budd Flitner, discussing her new book “My Ranch Too – A Wyoming Memoir” on Monday, and on Tuesday at noon, Bridger Feuz with UW Extension discussed the livestock market outlook.

According to Feuz, the economy, when it comes to the livestock market, has remained fairly steady. He said that the downturn in 2009 during the recession began to move upward in 2010 and has seen steady growth through 2019.

“In 2014, the beef demand index (an index based on beef prices and consumption) began to go up and has remained stable,” Feuz said. “Per capita consumption of beef hit a low point in 2015, but the market stayed up. This drop coincided with record-high retail beef prices in 2015. The high cost for the consumer caused a slump in consumption rates even though the market stayed up because they were paying more for what they were consuming.”

U.S. expenditures showed that there was less disposable income (3% on average) spent on beef in 2019. The economy, as defined by the Gross Domestic Product (GDP) had a slow but steady growth since the recession. Consumer confidence was strong and, even though consumption was trending downward, the overall demand was still keeping good price support.

Feuz said there were 31.8 million head of beef cows inventoried for 2019, and he gave an estimate of a 0.8% decline for 2020. Calf drop is expected to decline by 0.3% this year. In Wyoming in 2019, there were 714,000 head of beef cows, and that should remain fairly steady for the next few years; however, Feuz said heifers will see a 3.4% decline in 2020.

“Cattle are on feed over 120 days and they are feeding longer at the Kansas feedlots,” Feuz said. “Reasons for this might be slower weight gains due to adverse weather. But even with feeding longer, it is costing less due to corn prices being down and an average price for alfalfa hay.”

Beef production will top out in 2020 after five years of herd growth, Feuz said, and it will begin to decline in heifer retention and beef production. But Feuz said they are still projecting an increase in 2021.

Exports remain stable with South Korea and Japan being the major buyers, with Canada and Mexico following. The next to the lowest importer of U.S. beef is China with 2.5 million pounds per month.

“We shouldn’t base our concerns on China in terms of beef trade. Currently, exports to China are one-tenth the scale of Canada, and only 3% the scale ... compared to Japan,” Feuz said. “We export more than we import. Export value for the beef industry in 2019 was over $2 billion, and total beef exports look positive. Input costs are a big variable; however, the price outlook for 2021 is projecting a slight growth, and the export market is the key for price support. There is a slight growth in prices projected for 2021.”

When asked if several recent meat substitutes that have hit the market have caused any concern for beef producers, Feuz said it is too soon to tell.

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