Weather, trade and domestic trends could all help increase prices for beef producers in 2020.
A Cattle on Feed Report released by the USDA Friday showed the number of cattle on feed is up 2 percent compared to this time last year, according to Jeff Swenson, livestock and meat specialist at the Wisconsin Department of Agriculture, Trade and Consumer Protection. He added the number of cattle placed in the feedlots was up 3 percent from a year ago, but there are more heifers going into feedlots.
“That would indicate that herd expansion is over,” Swenson said. “People aren’t keeping as many heifers for replacements. Looking at total supplies going forward, once we get through these cattle that are on feed, we’re looking for better prices for farmers just because we’ll have a lesser supply.”
There has been some concern about a backup of hog slaughter lowering pork prices and giving consumers a reason to choose pork over the more expensive meant-beef. Swenson acknowledged that the United States has more hogs than it can process, but trade agreements should help with the pork supply.
“If we can get the pork and beef exported to Mexico, Canada, China, Japan, that should alleviate some of this, and we won’t compete domestically on price between our proteins,” Swenson said.
China’s pork supply had been hit hard by the African Swine Fever, which could lead to protein export options for pork and beef, but there is no guarantee of securing that market.
“We compete on a quality basis very well with Brazil and Australia,” Swenson said. “Those are our biggest competitors as far as beef going into China, but we’re doing a good job marketing beef and pork to China. We’re competing with Brazil. Right now, Brazil is more attractive on a price basis to go into China, but their pork needs are so high that we will eventually see them come to buy U.S. pork.”
He reminded beef producers that up until recently, U.S. beef was shut off from Chinese markets because of a case of BSE. Producers regained that market late last year. Additionally, because of natural disasters and fires in Australia, the competing country will have less beef to export.
“I think we’re positioned really good to help supply meet animal protein to the world,” Swenson said.
Warmer weather can also play a role. Winter months are considered a seasonal low as consumers purchase more ground beef and roasts. The spring and summer months are when middle meats and high-value cuts leave the grocery store shelves.
-Kaitlyn Riley
Leave a Reply