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| U.S. beef herds in decline; other meats such as chicken to benefit |
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URBANA, Ill. — The nation’s beef herd continues to decline.
“After several years of financial difficulty, producers show no interest in rebuilding the herd,” said Purdue University extension economist Chris Hurt. “As a result, beef supplies will continue to decline and prices will remain strong for several years to come.”
The USDA estimates that beef cow numbers as of July 1 dropped to 31.7 million head, a decline of 2 percent from a year ago. Milk cow numbers were down 1 percent. Just as important, producers reported they were retaining 2 percent fewer beef heifers to go back into the herds. This seemingly assures that beef cow numbers will continue to drop into early 2011.
According to Hurt, the expansion phase of the beef cycle normally takes about six years. Beef cow numbers reached a low in 2004 and began an expansion in 2005 and 2006. That all changed in 2007 as numbers turned lower. Since 2006, beef cow numbers have dropped by 5 percent.
“The great news is that beef supplies will remain limited in 2010 and 2011,” said Hurt. “Per capita beef supplies will be down about 2 percent this year and will fall an additional 1 percent next year. Smaller available supplies mean that consumers will have to pay more for beef and that cattle prices should remain strong well into the future, perhaps for three to five years.”
Hurt said the unfortunate side of the story is that other meats are going to absorb some of beef’s market share. Pork availability per person will be down by nearly 5 percent this year, but herd expansion is expected to begin late this year and into early 2011. This means that 2011 pork availability will be up 1-2 percent, especially late in the year.
The high feed prices and recession were difficult for producers of all species. Total meat and poultry consumption in the United States fell from about 222 pounds per person in 2006 to 208 in 2009.
“Chicken production will expand this year and next, and pork will be in expansion next year,” Hurt said. “This leaves only the beef industry with declining numbers and no expansion in sight.”
According to Hurt, if the long period of increasing consumption of meat and poultry has come to an end, the U.S. market will have limited growth potential in coming years. If that is the case, the domestic market may only grow at about the same rate as the U.S. population, which has been somewhat under 1 percent per year. |
| 8/4/2010 |
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