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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
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