By Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist
Many years of cattle herd liquidation, due to drought and other factors, have left the beef industry with such low cattle inventories that severe reductions in beef production are inevitable
Many years of cattle herd liquidation, due to drought and other factors, have left the beef industry with such low cattle inventories that severe reductions in beef production are inevitable. Beef production in 2014 is projected to total roughly 24.4 billion pounds, down 5.2 percent from last year and the smallest annual beef production in the U.S. since 1994. Cattle slaughter through mid-November is down 7.1 percent, including a 3.6 percent decline in steer slaughter and an 8.3 percent decrease in heifer slaughter. Total steer and heifer slaughter in 2014 is projected to be the smallest since 1968. The industry has offset some of the reduction in cattle slaughter by increasing carcass weights, with current steer carcass weights at record levels of 906 pounds, up 28 pounds year over year and heifer carcass weights at 829 pounds (down one pound from the week earlier record level of 830 pounds), and up 23 pounds from last year.
Concerns about beef demand have preoccupied the beef industry for many months and will continue for months to come as beef production is expected to fall in 2015 and into 2016 pushing retail prices higher. Steer and heifer slaughter is expected to decrease another two percent in 2015 which, depending on carcass weights, would contribute to another 1 to 1.5 percent decrease in total beef production. While beef demand in 2014 has been unexpectedly strong, the challenges will continue for many months. Retail prices have risen significantly in 2014 with All-Fresh beef prices currently 20 percent higher than year ago levels. Current retail prices undoubtedly do not fully reflect the impacts of declining beef supplies, even if production stabilized at current levels. With additional decreases in beef production ahead, the demand challenges will persist.
CLICK HERE to read the rest of the article.
Posted by Jami Howell