Bullish Outlook for Ag
CoBank Forecasts Shrinking Supplies, Stronger Demand for Beef
By Victoria G Myers, Progressive Farmer/DTN
In its latest quarterly report, CoBank's staff of veteran analysts present a largely optimistic outlook for farming, noting that "on the rural front, agriculture has its swagger back."
Specific to the beef industry, analyst Will Sawyer reported mid-February's major winter storm and freeze caused a brief slowdown in beef processing and demand, but it was short-lived with no negative or long-lasting market implications. He noted the USDA projected beef production would decline by 3.5% in the second half of 2021, bullish to cattle prices, now about 15% above year-ago levels.
Demand is behind the strong first-quarter report, even though foodservice remained below year-ago levels. Sawyer said the positive outlook tied to beef demand is driven in part by progress on the COVID-19 vaccine rollout. But there were other positive factors, too, including plans to build new plants across the country and to expand capacity of existing plants.
Sawyer said the beef industry's limited capacity for processing was a weakness amplified by the pandemic and that while limited capacity expansion is forecast for 2021, continued growth in coming years will be critical to improved profitability for the cow-calf, stocker and feeding sectors of the industry.
OTHER AG MARKETS SHOW STRENGTH ...