Beef Buzz News
Tight Beef Supplies Fuel Higher Prices, Export Concerns
Wed, 24 Oct 2012 16:42:43 CDT
Derrell Peel Beef Buzzes about tighter beef supplies.
Tighter and tighter beef supplies seem to be on the way. Three to four percent fewer pounds of beef will be available in 2013 according to livestock marketing specialist Dr. Derrell Peel of Oklahoma State University. He says higher prices are likely to result.
"I think we're already seeing those in some sense. As we go forward it gets to be a bigger issue because the supply pressure will be even greater. This year, repeatedly, we're now for the third time this year bumping up into $1.95 to $2 range for choice boxed beef and that $2 ceiling seems to be a very, very strong barrier to us right now. I think it's a very strong psychological barrier at the wholesale and retail level. I do think we'll go through it. We may go through it before the end of this year. If not, I think there's a greater chance we'll go through it in the first quarter of next year."
Even with the rising prices, Peel says, consumer demand is there and, possibly, may increase.
"I think beef demand in the U.S. is improving, but I think it's improving pretty much in lockstep with the rate at which the general economy is improving and that's a pretty sluggish rate right now."
Even as demand improves in the U.S., exports are a different story, Peel says.
"All in all, we expect exports in 2013 to be down in absolute tonnage partly because we're not producing as much beef. And, in fact, if you look at exports as a percent of beef production, it'll probably be about constant. But, just for price reasons alone, it's going to be more expensive."
He says exchange rates play a big part in tempering demand and it's easy for U.S. beef to get priced out of some markets like Mexico where imports of U.S. beef have been lagging since 2008.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network- but is also a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show- and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
This is one of several Beef Buzz shows that will feature Dr. Peel and his comments about the beef and cattle markets. If you want to hear our complete conversation with Dr. Peel now, click here for our Ag Perspectives Podcast with Dr. Derrell Peel.
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