Annual beef production is at an 18-year low, down 5.1% from one year ago. The quarterly year-over-year growth rate is minus-3.4%, but rising slowly (gray line in “Rate-of-Change” chart shown above). This suggests that while the pace of decline is easing, there is no strong upside momentum to indicate a positive result this year.
The decline in beef production is consistent with a historically low U.S. cattle inventory that has raised producer prices (beef and veal) 14.6% in the last 12 months. Limited beef production has led to a higher cost this year for consumers who have looked for alternatives. Consumption is up 3.4% (annual basis): a slower pace than last year’s 5.2%.
Herds are increasing and gaining weight due to healthier pasture conditions and extra feed time. This, along with gains in cattle inventory, should lead to lower beef prices in 2016.
Report Abusive Comment