A closer look at USDA’s beef production estimates
The latest beef production estimates from the USDA show a decline in the third and fourth quarter of this year and a decline in overall beef production as a result of the COVID-19 outbreak.
University of Missouri’s Scott Brown says if production does decline that much there could be some pretty good price strength late in the year. “That’s a pretty healthy cut if you look at per capita consumption on an annual basis of beef,” he says. “USDA would say that’s about 1.5 or 2-pounds less.”
However, Oklahoma State University’s Derrell Peel says he’s not revised his beef production outlook for 2020 — yet. “It’s really more a matter of timing,” he says. “Those animals are still out there somewhere and they’re still going to come to town. I think a lot of what we’ve done is dramatically revise the timing of things between Q2, Q3, and Q4.”
Peel says there are concerns if the economy and domestic demand can’t recover quickly. “That’s where the potential is, I think, to see some real pressure in the market,” he says.
The May Supply and Demand report also provided a first look at 2021 beef production, and it showed an increase. Brown says that kind of growth in beef production could make his price outlook for 2021 less optimistic.
Both Peel and Brown participated in the recent webinar hosted by Brownfield on the impact of COVID-19 on the beef industry. You can view that HERE.