Yet another prediction for the beef business in 2019

Will consumers keep eating beef at levels high enough to overcome greater supplies? I think so.

 

Burt Rutherford, BEEF Magazine

Jan 09, 2019

 

One of the favorite things that ag economists and folks in the writin’ business like to do around this time of year is to look back at the year that was and predict what will happen during the year that will be. We’re sometimes wrong, but that hasn’t stopped us before and isn’t likely to slow us down anytime soon.

 

That said, I’ve been looking at some historical price graphs sent to me by Ed Czerwien, who does three market reports for beefmagazine.com every week, and found the information very instructive. One is this five-year chart of fed cattle prices.

 

Typically, and for the most part historically, fed cattle prices have followed a fairly predictable seasonal pattern—starting to climb around the end of a year and generally increasing through April of the following year, then a general decline through the summer and fall.

 

There are a lot of factors that contribute to that seasonal pattern, but the weight of cattle placed on feed and consumers’ seasonal eating habits are two of the most important.

 

What struck me about this graph is the deviation from that historical seasonal pattern the last few years and particularly 2018. Fed cattle prices began their upward tangent much earlier in the year. In fact, fed cattle prices began to uptick in September last year and the graph indicates that will continue.

 

Is this due to the exceptional beef demand we saw last year? I believe so.

 

Nobody predicted that kind of beef demand a year ago. But if you’re going to be wrong, that’s the way to do it. There’s no doubt in my mind that the exceptional beef demand we enjoyed both here and abroad last year put extra dollars on cattle prices.

 

Comes now the prediction for 2019. I think that exceptional beef demand will help underpin cattle prices this year, too. As to how much, I won’t hazard a guess.

 

That’s because there are a few headwinds...

 

more, including links, chart

https://www.beefmagazine.com/commentary/yet-another-prediction-beef-business-2019