Beef Buzz News
As Boxed Beef Prices Have Dropped Significantly in Recent Months, Dr. Glynn Tonsor Says The Biggest Concern Now is on The Demand Side.
Tue, 14 Jul 2020 08:26:54 CDT
When wholesale boxed beef prices skyrocketed earlier this spring a major concern was on the supply side. Dr. Glynn Tonsor, Kansas State University Extension livestock market economist has been looking closely at this issue and says today the main concern is on the demand side as boxed beef prices have dropped significantly.
Ron Hays Beef Buzzes With Dr. Glynn Tonsor
In early May the wholesale boxed beef trade shot up to $475 per hundredweight because of reduced slaughter capacity. Today the market has dropped more than $200. Is this the bottom?
I think there is a couple of big pieces to that, Tonsor said.
One is the number of animals we’re processing, which is down about 6 percent compared to last year, on a cumulative basis, but we’re actually ahead of last year for this period, Tonsor said.
We are no longer in a tight supply problem as we were in April and May
The biggest uncertainty is on the demand side, Tonsor said.
Both domestic and global demand has been impacted by the pandemic and going forward how much will that continue to impact demand?
Is the cutout able to find a footing? I don’t know, Tonsor said.
All the story now is on the demand side with a ton of unknowns putting pressure on the market, he said.
Down the pipeline towards the consumer, Tonsor has surveyed consumer attitudes towards beef.
The meat demand monitor shows retail sales for ground beef and ribeye steak was up in June as compared to May, Tonsor said.
Consumers are also showing less concern about having enough meat on hand.
In May 14 percent said they have less meat than normal, Tonsor said. That number dropped to 12 percent in June.
To learn more about Tonsor’s meat demand studies, go to the dedicated website by clicking here.
Click on the LISTEN BAR below to hear more comments from Dr. Glynn Tonsor.
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