As dairy farmers, we focus a lot of attention on milk prices and demand for dairy products, but the price and demand for beef also plays an important role in profitability and how we manage our herds.

According to Brenda Boetel, a professor at the University of Wisconsin-River Falls and an extension commodity marketing specialist, livestock producers in the U.S. did not produce as much beef, pork, and poultry in 2023. She shared more details in a presentation at the Wisconsin Agricultural Outlook Forum.

Looking specifically at beef, she said that steer slaughter was down in 2023, while heifer and cow slaughter was up. There is also a higher number of heifers on feed, which she said means producers are not holding heifers back as replacements. “We have not yet started to grow our beef herd,” she noted.

Therefore, this decline in production will continue into 2024 and possibly longer, affecting the supply of U.S. beef. This reduced supply plays into export sales, which were also down in 2023.

Boetel shared that beef exports were 14% lower relative to 2022. Meanwhile, imports were up about 7%.

“What we export and what we import are different, though,” Boetel noted. “All beef is not equal.” She explained that we tend to export higher valued cuts and import lean products.

Supply limitations, coupled with a strong U.S. dollar, led to reduced imports, she said. Exports to our top markets – Japan, South Korea, and China – were down 17% to 22% in 2023 relative to 2022.

“We don’t have as much product, that is the biggest issue we are seeing when looking at beef exports,” she said. “We will be down in production in 2024, so we will see beef exports continue to decline in 2024.”

What about domestic demand?

With retail prices up 3.9%, it is not surprising that domestic demand was down, but Boetel said demand for beef fared better than anticipated. “Demand was stronger than expected,” she noted.

Whether or not that strong demand continues into this year remains a question mark. Both pork and poultry retail prices were down slightly last year, while beef prices rose about 4.6%. Similar prices are expected for 2024.

Demand for meat depends on consumer confidence and their willingness to spend, and beef tends to be impacted most because it is the highest priced product, Boetel said. Will 2024 surprise us with better demand than expected, following in the footsteps of last year? Or will the economic recession take a toll on consumers’ beef purchases? Time will tell.

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(c) Hoard's Dairyman Intel 2024
February 12, 2024
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