Cash live cattle prices continue to defy the odds that would appear to be stacked against them. Those odds include futures prices that are far below cash prices, a contra-seasonal increase in front-end cattle supplies and carcass weights that have declined far less than normal.
On a live cattle price basis, a five-area steer averaged $182.67/cwt live or $292.35/cwt dressed the week ended April 21. They have increased every week (five) since then and averaged $190.09/cwt live or $303.49/cwt dressed the week before last. Both prices were all-time record highs. Yet prices might have gone slightly higher last week. It is apparent that cattle are in strong hands and that cattle feeders are determined to get higher prices during the best two demand months of the year (May and June).
Meanwhile, I recently came across a fascinating report that said the global beef market in 2024 will be worth $450.5 billion and its value is expected to reach $645.6 billion by 2033, at a compound annual growth rate of 4.5% during the forecast period 2024-33. So says a new report from Custom Market Insights, a market research and advisory company. The global beef market is segmented by product type, distribution channel and region, says the report. The market is classified into loins, chucks, rounds, brisket ribs and others.
Loins dominated the market in 2023 with a market share of 35% and are expected to keep their dominance during the forecast period. The beef industry is significantly impacted by consumer demand for multiple loin byproducts, which are essential components of the business. Sirloins, tenderloins and T-bone steaks fetch high rates due to their tenderness and flavor, says the report.
These high-value cuts increase profits for cattle ranchers and processors, says the report. Furthermore, loin trimmings and ground beef made from loin cuts are popular among consumers looking for low-cost, delicious solutions. Moreover, loin byproducts such as ribs and backbones are used in a variety of culinary applications, increasing the total flexibility and marketability of beef products.
The demand for various loin byproducts varies according to customer tastes, culinary trends and economic circumstances, making them important drivers of the beef market’s dynamics and profitability, says the report.
Rising consumer preference for protein intake is the first factor the report cites for the beef market’s growth. The increasing consumer appetite for protein consumption is a major driver of the beef business. As consumers become more aware of the necessity of protein in a well-balanced diet, they seek out high-quality protein sources such as beef.
Beef is not only high in vital minerals such as iron, zinc and B vitamins but it also has a full amino acid profile required for muscle development and repair. The popularity of high-protein diets, fitness trends and the impression of beef as a satisfying and tasty protein source all add to its demand, says the report.
Beef’s adaptability in many cultures and recipes also makes it a popular choice among consumers looking for healthful and enjoyable meals, says the report. The National Cattleman’s Beef Association, a contractor for the U.S. Beef Checkoff program, collects a wide range of consumer information about their attitudes and eating habits regarding beef.
Interestingly, for the third year in a row, beef is listed in the top three proteins, whereas plant-based replacements and insect proteins score far below. Over 60% of consumers constantly see beef positively, with less than 15% viewing it negatively, says the report.
The increase in disposable income benefits the cattle industry in numerous ways, says the report. People tend to consume more high-quality protein sources such as beef due to its flavor and nutritional content. This increases the need for beef products. Customers with greater financial resources are more likely to purchase premium beef cuts and value-added goods, increasing beef producers’ sales and earnings.
Furthermore, increased disposable income is frequently associated with urbanization and lifestyle changes such as dining out and convenience food consumption, which fuels the popularity of beef-based meals and packaged beef products.
The rising popularity of internet channels has greatly increased sales in the frozen beef industry, says the report. Online platforms offer consumers easy access to a large range of frozen beef products, allowing them to purchase from the comfort of their own homes and quickly compare pricing. Furthermore, internet shops frequently provide coupons, sales and bulk buying opportunities, which appeal to price-conscious customers looking for good value for money.
The convenience of accessing product descriptions, customer feedback and nutritional data online boosts consumer trust in buying frozen beef products. Moreover, the worldwide accessibility of internet platforms allows consumers to obtain niche or imported beef items that may not be available in local brick-and-mortar retailers, says the report. — Steve Kay, WLJ columnist
(Steve Kay is editor/publisher of Cattle Buyers Weekly, an industry newsletter published at P.O. Box 2533, Petaluma, CA, 94953; 707-765-1725. Kay’s Korner appears exclusively in WLJ.)
