Beef Buzz News
Derrell Peel Analyzes Multiple Reasons Ground Beef Market Holding Strong
Fri, 10 Jun 2022 09:52:12 CDT
Ron Hays, Senior Farm and Ranch Broadcaster, visits with Dr. Derrell Peel, Oklahoma State University livestock market economist, about ground beef demand and beef cow liquidation. As we have now passed the first holiday of the summer season, Memorial Day, there was not the usual jump in ground beef demand. Peel says the demand for ground beef has been stronger than usual, so the high demand was actually there all along.
"If you look over the last several months, back to about this time last year, we saw beef markets at the wholesale level, in particular, across the board for all the cuts as well as for ground beef," Peel said.
If you look at a generalized ground beef price series, Peel said it moved sharply higher about a year ago, stayed high through the rest of the year, and has continued to stay high this year.
"We didn't see that May increase seasonally, but we were already at a very strong level, and we just really haven't seen that ground beef market falter at all," Peel said.
Some of the other beef cuts that were high last year, Peel said, have actually adjusted down significantly from the beginning of the year to now.
"The ground beef market continues very strong at this point," Peel said.
Peel said beef cow slaughter is up 15 percent year-over-year for the first 20 weeks of 2022. That has provided extra beef to go into the pipeline for the ground beef market, which he said will continue to hold strong.
"One of the things we have been watching is evidence of what we typically talk about when prices get high and in an inflation environment," Peel said. "We talk about consumers trading down in their beef purchases."
Because of inflation, Peel said consumers are still buying beef, but they will trade some of the higher-end products for a product of lower value to get a better price.
"Ground beef usually is one of the places they would turn to," Peel said. "The ground beef market has continued strong, but I don't think the strength we see today is a result of significant amounts of trading down at this point."
Peel credits much of the ground-beef demand to grilling season and fast-food restaurant demand that has been strong for the past year.
Switching gears, Peel talks about beef cow herd liquidation in 2022.
"The level of slaughter that we had even before we got into springtime was very noticeable," Peel said. "Of course, we carried over a lot of drought from last year."
Peel said producers took advantage of the cull cow market which was strong until recently. The conditions in the county suggest there will continue to be fairly strong cow movement, he added, and the result of that is seeing a significant decrease in the cow herd inventory on January 1.
Click the LISTEN BAR below to listen to Ron Hays and Derrell Peel talk about ground beef markets.
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.
Listen to Ron Hays Beef Buzz with Derrell Peel on Ground Beef Market
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