Beef Buzz News
Beef Prices Likely Will Not Rise Anymore as Consumers Deal with Inflation
Wed, 20 Oct 2021 20:06:07 CDT
Even Uncle Sam is having to acknowledge inflated prices in the U.S, increasing social security by 5.9% at the start of the new year. For beef cattle producers, worries about the effects of inflation on beef at the retail level are something to keep an eye on.
Listen to Ron's conversation with Dr. Peel here.
Radio Oklahoma’s own Ron Hays visits with Derrell Peel, extension livestock marketing specialist at Oklahoma State University, for the second day. Yesterday they discussed the value of winter wheat pasture this season. Today, they discuss inflation’s effects on the beef cattle industry.
“It is certainly something to be concerned with,” Peel said. “I think there will be some tempering of demand as we go forward. I do not necessarily think this is a big issue or one that is going to spiral out of control.”
Right now, consumers are paying more to fill up their automobiles, winter heating costs are expected to be higher than normal and protein options at the grocery store or at restaurants are higher across the butcher board. Peel said he thinks the economy, in general, is trying to sort out a lot of different dynamics.
According to Peel, the increase in beef prices has consumers’ attention.
“We had a stronger-than-usual in late summer in the boxed beef market,” Peel said. “We are getting some indications, in terms of retail prices that we have reached a level where there is a little bit of pushback on the consumer side.”
According to Peel’s analysis, he said beef has reached a price ceiling he does not think it will break this winter. That may have some cattle producers asking themselves, or Dr. Peel, if prices will stay high enough for feedlot cattle to turn a profit in the next year.
“Feeder cattle markets have moved higher in the last few weeks, so those cattle in the feedlots are going to need a little bit higher number as we move forward,” Peel said. “We are looking at break-evens moving into the $1.20 to $1.30 (price range) as we finish out the year.”
Generally, in rural areas both feeder cattle and feeder calf prices are higher, he added. Ultimately, turning a profit will come down to how producers manage feed costs this winter.
Click on the LISTEN BAR below to hear more from Ron Hays and Dr. Derrell Peel as they talk about inflation, boxed-beef prices and how all that will impact U.S. cattle producers in the coming year.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is 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.
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