Describe the Relationship of Supply and Demand for Beef
Supply and need challenges go on for beef industry
Wednesday, June 27, 2018
Every bit projected past manufacture analysts, supply pressures go along to build in beefiness markets, with the uncertainty and volatility that comes with a potential trade war only increasing concerns in the second half of the year.
Beefiness trade in early on 2018 has been very supportive to cattle and beefiness markets but this could alter going forrard, cautions Derrell Peel, Oklahoma State University Cooperative Extension livestock marketing specialist.
"Beef markets may be directly impacted in terms of exports but the more pregnant impacts may be the indirect result, such as reduced pork exports and increased domestic supplies of competing meats," he said. "A multitude of markets are likely to exist affected and the impacts will pulse through markets in a complex gear up of primary and secondary effects that is difficult to foretell but is probable to be negative."
Peel points out in that location are a variety of supply and demand factors to watch in the second half of the year. Beef production volition be adamant past slaughter rates only fifty-fifty more by carcass weights moving forward. Drought conditions do not appear to exist causing significant herd liquidation at this fourth dimension but the threat is still there.
"Further slowing of heifer retention and herd growth, in part due to drought conditions, continues to add to female slaughter and could continue through the stop of the yr," Pare said.
To date, beef product so far this year is up 3.vi percent on larger cattle slaughter and increased carcass weights. Year-to-date cattle slaughter is upwards 3.8 percentage driven past increases in female slaughter.
"Heifer slaughter is upwardly 8 percent year over yr and moo-cow slaughter is up 8.1 percent so far in 2018," Peel said. "Beefiness moo-cow slaughter has increased 12.two percent and dairy cow slaughter 4.5 percent compared to this time last yr."
Even so, steer slaughter increased a minimal 0.1 percentage compared to this time last year.
Cattle carcass weights are up year over year after dropping sharply in 2017. Overall carcass weights increased by nearly 5 pounds compared to this time last year. In terms of specifics, steer carcass weights are up almost seven pounds and heifer carcass weights take increased more than 8 pounds compared to this fourth dimension terminal year. Cow carcass weights have increased virtually 8 pounds compared to last year.
"Steer and heifer carcass weights accept bottomed seasonally and will increase to seasonal peaks in the fall simply the question will be how much and how fast volition the seasonal increase in carcass weights be compared to last twelvemonth," Peel said.
Beef production is typically larger in the second one-half of the twelvemonth and continued year-over-year growth in beef production is expected to contribute to almanac beef production growth of more than 4 percent twelvemonth over year in 2018.
In 2017, unexpectedly strong domestic and international beef need provided extra support for cattle and beef prices in the face of growing beef supplies. To some extent that has continued in 2018, though not as pronounced as a twelvemonth ago. After belongings quite house through May, boxed beef prices were under pressure into mid-June with Option boxed beefiness price dropping about $5 per hundredweight recently.
"Big beef supplies are weighing on markets and the challenge may grow moving into the summer doldrums between July 4 and Labor Twenty-four hour period," Peel said. "However, relative fed cattle supplies are expected to tighten in the tertiary quarter."
Fed cattle prices have declined seasonally but are generally belongings better than many analysts projected. In early on Apr, the June Live Cattle futures dropped under $100 per hundredweight only have since traded as high every bit $110 per hundredweight, and as of this writing are trading at about $108 per hundredweight.
"Of form, June isn't over and the side by side couple of weeks could accept a significant effect on commodity markets equally the reality of a trade war settles on markets," Skin said.
Feeder cattle prices have declined seasonally from their jump peaks but accept remained quite robust thus far in 2018.
Oklahoma is the nation'south 5th-leading producer of cattle and calves, according to USDA National Agronomical Statistics Service data.
The Oklahoma Cooperative Extension Service is one of two state agencies administered by OSU's Division of Agricultural Sciences and Natural Resources, and is a central part of the academy'south state and federally mandated educational activity, enquiry and Extension land-grant mission.
By Donald Stotts
SVG directory not plant.
Source: https://news.okstate.edu/articles/agriculture/2018/stotts_beef-supply-demand-challenges.html
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