Beef demand seems to be holding steady despite a very high plateau in current beef prices—that according to Tyler Cozzins, agricultural economist at the Livestock Marketing Information Center. The most recent beef retail prices tracked by the federal government come from June 2022.
“In June, retail beef prices were $7.66 per pound. This is up 20 cents per pound from last year. The record price we have seen for beef actually occurred in October of 2021 and that was $7.90.”
Cozzins says July prices are expected to remain high based on what we are seeing as far as wholesale prices that have occurred over the last month. And, in the face of inflation and slowing of herd rebuilding efforts, beef prices remain elevated and domestic beef demand holds strong.
“This inflationary environment that we’re living in, coupled with a slowing in current rebuilding efforts, keep the prices elevated, but domestic demand is still holding strong in the face of those challenges. It’s just, what’s the tipping point here? I think we would have expected that to occur a little bit sooner, but consumers still seem to be buying their beef, I think they liked consuming that at home and they learned how to cook it.”
Foreign demand or exports of beef are a key piece of the demand picture as strong beef exports are supportive for domestic prices.
“Through those first five months of this year, beef exports totaled nearly 1.5 billion pounds. Now that’s a record pace for the first five months in a year. It is also a six percent increase from the same period last year. What this means is about ten percent of U.S. beef production is destined for these export markets. So, I think that’s important key, is just the pace that we’re shipping this and the amount.”
Overall, Cozzins the beef demand picture is looking positive, but the inflation environment that the U.S. and global economies are facing could prove to be a headwind in the near future. At this same time, he added, availability indicates beef demand is holding strong for U.S. beef, which is a positive sign for the industry.