Beef Buzz News
Dr. Glynn Tonsor Offers Analysis on Latest Longer Term Meat Consumption Stats From USDAThu, 19 Dec 2019 15:30:18 CST
Kansas State Livestock Market Economist Dr. Glynn Tonsor says that USDA, on a preliminary basis, has updated its 10-year models for meat consumption in this country.
Tonsor says that for 2020, per capita meat consumption numbers will be a little bit bigger than in 2019. "Every year for maybe 20 years now USDA's done this, and then they put out initial releases in November-December. And then the final numbers become available in February. First, let's take per capita volumes of consumption across the main meats, they're expected to peak actually in 2020, so this coming year is projected to be the highest in the upcoming ten years and higher than it was in 2019, up a full two pounds when we talk about total meats. And when you break that down, beef is expected to be up half a pound, be just under 58 pounds per person. Pork up almost half a pound again, just about 52 pounds per person and chicken is up more than a full pound per person right on 95 pounds. Now, before I go further, I'll remind folks per capita consumption is basically what we produce at home, plus what we import, minus what we export, make an adjustment for cold storage because we vary that month to month, and year to year, and then divide that by a growing U.S. population. That's how you get those numbers. So you can have a growing per capita consumption by having larger domestic production, by having bigger imports or having lower exports. And what's important in this story is we're actually projecting USDA, I would agree with this, is ongoing domestic production increases. We're going to increase exports, but not at the same rate. So those two offsets where we have more meat at home is embedded as a common story across all three meats."
On the other side of this, Tonsor also talks about cattle numbers, "The beef cow inventory in 2020 is forecast to be down 120,000 cows. If that occurred, that would be 31.6 million cows. That is consistent; I would argue if not just understated a little bit, with the number of cull cow transaction volumes we've had in the last couple of months. The cow inventory is expected to kind of trough out in 2022 at 31.2 million. So embedded in that is USD projecting a decline in the herd, but not a big decline. So I mean if you do the math on that it's less than a half a million, five hundred thousand cows that would be coming down from the peak. We've definitely had time in the past where the herd has come down by more than that. I'm going to highlight I could buy that is we might have plateaued, shrink the herd but not shrink it a lot, because from my perspective I don't see lots of strong negative margins for the cow-calf sector, at the moment, that is going to squeeze folks and cows out of the industry quicker.
"One of the punch lines on that was that cattle cycles have been getting flatter over time. So we don't grow it as high, we don't shrink it as low over time. I think there's a lot of reasons for that, the cost of getting in and out. We still have the same flexibility across ag enterprises, we once did and so forth. I think those are real and true. And these USD forecasts of a small decline not a large decline from now till 2022 would be consistent with that. The last thing I'll note here, cattle prices in 2020 across the different weight classes. So calves, fed cattle, and actually they have a backgrounding segment in there as well. They're forecasting kind of on par with 2019. Some of the numbers you've heard me and LMIC give would be on par If not a little bit higher. So maybe a little bit more optimism by your regular group. It's pulled here weekly than the USDA forecast. And I already made the other point that's core to why beef consumptions expected to go up, mainly domestic productions expected to go up more than any other changes that are going to lead to more beef being here at home."
The final numbers for this new ten-year cycle will be in February of 2020.
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