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BEEF INDUSTRY The Midwest Cattleman · March 11, 2021 · P10
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According to CattleFax CEO he estimates a U.S. beef cow in- petitive for Asian markets. Ac- Nature this spring and summer
Randy Blach, cattle numbers ventory of just under 31 million cording to Good, exports in 2021 will have concerning impacts.
will continue to contract in 2021, head in 2022. are expected to increase by 5% All session panelists agreed
and producers will gain leverage Good says 2021 is a tale of two primarily to Asian markets like that weather will be a major
on packers and retailers and halves. “There are more cattle in Japan, South Korea and China, factor impacting the beef indus-
margin distribution will be more the system early in 2021 with with declining imports from try, and agriculture as a whole
equitable. Packing capacity is big supplies on feed and heavy Australia and New Zealand. Al- in 2021. Although the La Niña
expected to increase slowly with weights, however the second though only 120 million pounds weather pattern has leveled off,
the addition of more small-scale part of the year will transition of beef were exported to China it will be making a return with
plants, and U.S. meat exports to tighter calf crops and tight- in 2020, that market is expected warm and dry conditions over
will continue to grow. Overall, er slaughter,” he said. In 2021, to grow to more than 300 million most of the United States into
profitability is expected to im- total slaughter is expected to be pounds per year over the next the summer, according to Dr. Art
prove significantly for cow/calf up 700,000 head to 33.5 million few years. Douglas, professor emeritus at
producers. head, average carcass weights 4 “The U.S. is the largest beef Creighton University. Douglas
Lost incomes due to unem- pounds lighter and beef produc- producer on the planet, produc- indicated that the southwest
ployment were replaced by gov- tion up 500 million pounds from ing 75 percent of all high-qual- U.S. will be warmer than nor-
ernment transfer benefits and 2020 to 27.6 billion pounds. ity fed beef in the world, and mal, and the western half of the
household wealth increased Per capita beef consumption our product is different from country will be relatively dry. In
more than $620 billion in 2020, is expected to grow slightly to competitors,” said Blach. “As the addition, dry conditions in the
according to Blach. In 2020, 58.6 pounds per person in 2021, global population increases at Rockies will eventually extend
total meat sales volume at retail up from 58.5 pounds in 2020, al- a rate of 83 million people per into the central corn belt, caus-
was up 10 percent and total dol- though per capita red meat and year, U.S. agriculture is poised to ing concerns for corn and soy-
lar sales at retail up 18 percent, poultry consumption is expected play a key role with increasing bean growers. “The Pacific jet
with beef’s share of the increase to decrease to 218.7 pounds per exports.” stream is positioned far north
in spending accounting for 45 person from 221.7 pounds per Mike Murphy, CattleFax vice from normal preventing mois-
percent or $5.7 billion. Consum- person in 2020. “Over the last president of research and risk ture from reaching the conti-
ers also saved at record levels 20 years, beef market share in- management services, estimates nent,” said Douglas. “The only
during the pandemic resulting creased from 40 to 48 percent, that there will be 181 million significant moisture will be in
in U.S. household net worth ris- up 2 percent in 2020,” said Good. planted acres of corn and soy- the Ohio Valley and along the
ing $5 trillion, which bodes well “Improvements in genetics, beans in 2021, the largest ever Canadian border from northeast
for beef demand going forward. quality and consistency have combined acres for those two North Dakota into Minnesota.”
As beef demand reached re- created a better product from commodities. “That number is Blach concluded the session
cord highs in 2020, cattle pro- five or ten years ago and have likely to be even higher, and in with an overall positive outlook,
ducers didn’t capture much of helped increase demand, taking some regards it needs to be larg- expecting beef demand to re-
the margin with the bottleneck market share away from pork er to balance the demand and main solid, foodservice markets
created due to plant closures as and poultry.” build back supply,” said Murphy. improving significantly and beef
a result of COVID-19. According Good forecasts the average Although corn should be able to and cattle prices trending high-
to Blach, the margin exists, and 2021 fed steer price at $119 per balance supply and demand, soy- er through 2024. He also noted
redistribution will lead to im- hundredweight, up from $109 beans will have a tighter supply that plant-based protein alter-
proving prices in the second half per hundredweight in 2020, with globally, with a smaller crop ex- natives will continue to grow
of 2021 and into 2022 and 2023. a range of $110-$128 per hun- pected from South America. market share, but gains will be
“The bottom line is that things dredweight throughout the year. As China rebuilds its pork slow. Blach indicated that in-
are on the mend, with produc- All cattle classes are expected industry following their battle creased consumer interest in
ers gradually recapturing mar- to trade higher than a year ago, with African Swine Fever, they sustainability, food safety pro-
gin,” he said. “A one percent shift and prices are expected to im- are looking for higher quality tocols, animal care and trace-
in margin will result in $6 per prove over the next three to four feed ingredients, such as corn ability creates opportunities for
hundredweight increase on fed years. The 800-lb. steer price is and soybeans, according to Mur- producers to differentiate their
price.” expected to average $145 per phy. The U.S. has the supply products if they choose.
Kevin Good, vice president of hundredweight with a range of available to provide the estimat- “Consumers are voting with
industry relations and analysis $135-$160 per hundredweight, ed 700 million bushels of corn their pocketbooks and buying
at CattleFax, reported that 1.2 and the 550-lb. steer price is that China is expected to accept. beef,” said Blach. “The industry
million head of cattle were liq- expected to average $168 per Spot prices for soybeans are should take note, stay focused
uidated in 2019-2020 after a 6.3 hundredweight, with a range of expected to be $13.50-$16.50 per on quality, continue delivering
million head expansion between $160-$180 per hundredweight. bushel for the remainder of 2021. what the consumer desires and
2014 and 2018. Even with fewer Finally, Good forecasts utility “As soybean prices drive higher, tell their great story.”
cattle in the system, beef pro- cows at an average of $64 per soybeans will have a greater NCBA
duction still increased. Mild liq- hundredweight with a range of influence on the value of corn,
uidation is anticipated in 2021 $52-$74 per hundredweight. bringing corn prices with it,”
due to drought conditions and Trade continues to be a hot said Murphy. He noted, howev-
higher feed costs, said Good, and topic, with U.S. beef prices com- er, than any scares from Mother

BEEF REMAINS per pound for store-brand 80% over plant-based alternatives is have seen in several studies,”
continued from page 3 lean ground beef at the grocery clearly in favor of the beef indus- Tonsor said. “Taste and safety,
store. Those who prefer alterna- try. The report notes that beef in particular, are key drivers of
alternative diets as vegan, vege- tive diets would pay $1.48 more is consumed three times more U.S. beef demand.”
tarian, flexitarian or other. Ton- per meal in a restaurant and up often than plant-based proteins
sor said regular meat consumers to $2.32 per pound more in the in the U.S. Among the factors KLA
reported being willing to pay grocery store. influencing consumers to choose
$1.87 more per meal for a beef Although there is strong pref- beef are taste, safety and price.
burger in a restaurant. They erence on both sides, the num- “Those are key differentiation
also would pay up to 29¢ more ber of consumers choosing beef points we see in this study and