Beef Buzz News
Dr. Glynn Tonsor Gets Good Vibes From Beef Demand
Wed, 06 Jul 2016 15:07:37 CDT
Summer holidays are always popular occasions for grilling beef. It is never a surprise for markets to see an uptick in beef demand during these times when meat is on the mind. While, spikes in the market are never an upset, profitability in the industry relies on strong, sustained demand throughout the year. Extension beef economist Dr. Glynn Tonsor of Kansas State University, especially well known for his beef demand work recently shared his current analysis, for which he feels rather optimistic coming out of the recent holiday weekend.
“Pundits don’t talk as much on the non-holiday weeks, we move a lot of volume in those,” Tonsor said. “We don’t have the same kind of grilling sales at the grocery stores and so forth, that’s why we don’t talk about it the same. But it is important that we maintain a sustained aggregate demand and not just for the nice steaks we all like to talk about throwing on the grill but for the entire set of products that come off that carcass.
According to Dr. Tonsor, the observations he is making in his work seem to be supportive of a favorable trend for the beef industry.
“Currently I have these quarterly crude indicators that are very aggregated, but from what I can see, I’m pretty optimistic. There’s more positives than negatives and the main one I can point to is the all fresh beef price tends to be holding up when we know we’re increasing poundage. That’s a pretty strong indicator that demand is at least holding on if not improving. I hope to confirm that soon, obviously I hope our listeners recognize that if we hold on to that wall of expanding production - that’s really good, and enables us to keep higher, cut-out values, fed cattle prices and feeder cattle prices while expanding the herd. That’s critical to bottom line profitability for the entire industry,” he said.
Dr. Tonsor continues to delve into his market research as we come out of the recent Fourth of July weekend frenzy, but based on his findings so far, is predicting what he hopes to be a month that perhaps fostered a beef friendly environment in the marketplace.
“We had a month where we had strong all fresh beef price,” Tonsor said. “We had less beef in the cold storage freezers. We had a positive marketing story from the cattle on feed report. All of that is good. We’ve talked in the past about the choice select spread. All of those are indicators of strong meat demand. I think that all sets itself up well for hopefully what we look back on as a good Fourth of July grilling environment.”
Listen to Dr. Tonsor talk more about beef demand during the latest Beef Buzz.
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