US Beef Demand: A Booming Market Amidst Rising Prices

A monthly column written for Beef Central readers by US meat and livestock markets commentator, Steve Kay, publisher of US Cattle Buyers Weekly

STRONG beef demand at home and abroad is undoubtedly the top story of the year for the United States beef industry.

Despite soaring retail prices, consumers have continued to buy beef, leading to new record highs in cash live cattle prices for seven consecutive weeks. However, as retailers begin to increase everyday beef prices, the sustainability of this demand might soon be tested.

Seasonal Trends

The peak retail week for beef sales, Memorial Day on May 26 this year, saw a significant spike in wholesale beef prices throughout May. However, retailers are likely to prioritize ground beef and other meats such as pork and chicken for the upcoming July 4 Independence Day, the second-largest retail beef sales period of the year, due to elevated wholesale prices.

Current Pricing Trends

In April, the All Fresh beef retail price averaged $8.50 per pound, up from $8.42 in March and reflecting an increase of 6.9% from the previous year. The USDA Choice beef retail price also set a new record, averaging $8.83/lb. In stark contrast, pork and chicken prices remain significantly lower, averaging $4.91/lb and $2.06/lb, respectively.

North American Beef Demand: A Positive Outlook

While it is anticipated that retail beef demand in the U.S. may decline in the coming months due to rising prices, Canadian beef demand presents a more promising picture. Canadian market analyst Kevin Grier suggests that, despite a 3% decline in per capita beef consumption last year, overall beef demand in Canada showed a 2% increase, thanks to a significant rise in prices.

US Beef Consumption: A Different Story

Contrary to Canadian trends, US beef consumption actually increased by 3% last year. Paired with a 5% rise in consumer prices, this translates to a robust 5% growth in demand for 2024. US beef consumption has reached historic levels, demonstrating that consumer enthusiasm is vital to maintaining high cattle prices, according to Grier.

The definition of improved and robust beef demand

US beef demand, driven by consumer interest despite elevated prices, serves as a key factor propelling cattle prices to their current levels.

International Demand for US Beef

Demand for US red meat continues to reach record highs in several international markets, even amidst increasing competition. This sentiment was echoed by Dan Halstrom, President and CEO of the US Meat Export Federation (USMEF), during the spring conference.

USMEF is focusing on both defending its market share and exploring new opportunities globally. Recent expansions in West Africa, Malaysia, and Indonesia exemplify these efforts, with a recent trade seminar in Accra, Ghana, attracting buyers from 12 African nations.

Long-Term Vision

Halstrom compared USMEF’s long-term strategies to Berkshire Hathaway’s investment philosophies, emphasizing the importance of focusing on substantial, sustainable market opportunities rather than short-lived trends. With a growing global population and an expanding middle class, USMEF aims to target high-tier consumers willing to spend on premium protein.

Despite fluctuations in international trade discourse, USMEF remains committed to its long-term objectives, keeping an eye on evolving consumer preferences and spending capabilities.

Editor’s note: 1976 was in the midst of the ‘Beef Slump’ era, when both US and Australian herd sizes skyrocketed, causing beef prices to drop and consumption to reach unprecedented levels.