USDA predicts beef production will rise, consumer prices will fall |

USDA predicts beef production will rise, consumer prices will fall

silhouette of a group of brown cows looking at the camera in a farm land in Uruguay with blue sky. This is the result of intensive livestock business in South America 2014.
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Beef production projections

2015 / 29.7 million head

2025 / 33 million head

Cattle inventory projections

2015 / 89.8 million

2025 / 97 million head

Consumption of red meats and poultry

2015 / 211 pounds/person

2025 / 219 pounds/person

The downward trend of commodity prices around the country are projected to hit the beef and pork industry, according to the U.S. Department of Agriculture’s projections.

Foreign exports, accessibility and broiler popularity all contributed to an increase in consumer prices in the beef industry.

The USDA projects there will be an 11.7 percent increase in production of beef by 2025, along with a 10.3 percent increase in pork production. The increased production leads to an increase of product, which ultimately leads to a lower price for consumers and the reduced prices trickle down to a lower price for producers.

Broiler chickens have been the most popular meat for consumers, with some experts attributing price, cut and options consumers have. Beef, on the other hand, has declined the past decade, along with pork.

The shift in beef production in prices is directly related to commodity prices crop farmers are dealing with. With the over production of corn and other crops, feed prices also dropped.

The USDA predicted the price of beef would drop about 10 percent by 2025.

Part of the expanding beef market comes from an increase in exports of beef, as well. It was recently announced the 13 year ban of beef products to China, which factors into the increased demand on beef. In June it was announced Saudi Arabia lifted its ban, as well.

“Although the Chinese market wasn’t a huge market before the ban, we see the potential for this to be a very large market going forward,” Barry Carpenter, North Amer-ican Meat Institute president and CEO, said to Tri-State Livestock News.

Both countries, and others, didn’t allow beef exports from the U.S. due to BSE levels found in the beef. As that problem has been addressed, countries are slowly allowing beef exports once again.

“Having another export market open is always good news for the U.S. beef industry because it’s good for demand,” said Bill Bullard to Tri-State Livestock News. “The problem is back at home, our U.S. domestic market is so saturated, the trickle down effect doesn’t happen.”

The lacking trickle down effect is what is hurting farmers at the moment. With the state of commodity prices, even the largest harvests in corn, farmers are still struggling to break even. The same might be seen in the beef industry as trends continue. ❖

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