Consumers Demand Beef At Higher Prices

The third quarter of 2015 showed continued positive shifts in fresh beef demand that brought the retail fresh beef demand index up to 94 from 87 in 2014 and the highest third-quarter reading since 1991.

The Retail All Fresh Beef Demand Index is a product of the Livestock Marketing Information Center and is calculated by comparing retail per-capita disappearance and the Consumer Price Index retail meat price as calculated by USDA-ERS for the quarter to what would be expected if demand remained constant at 1990 levels (base year).

The increase in third-quarter beef demand includes a slight, 0.25-pound, or 2%, increase in per-capita disappearance, which can be attributed to an increase in US beef imports this year, the LMIC said.

Retail fresh beef prices posted a 6% third-quarter increase from the same quarter a year ago.  However, this is down from last year, when it posted a 14% year-over-year jump.




But that higher third-quarter beef demand did not come at the expense of pork demand, which also was calculated to be higher in the third quarter, but apparently it did so amid lower prices.

The LMIC’s third-quarter Retail All Fresh Pork Demand Index rose to 91 from 88 a year earlier and was the highest since 2004 when it also stood at 91.  The third-quarter index also tied the 2000 number but was short of the 1999 level of 93.

Per-capita pork disappearance increased 9% year-over-year, and prices declined 8%.

While consumers responded to substantial increases in pork production by buying more at lower prices to clear the market of the larger supply.  However, the price decline was less than if demand had held steady.




Plains direct fed cattle markets remained quiet Wednesday with the USDA reporting only scattered action via its mandatory price reporting rule.

For the week to date, only 595 steers were sold at an average price of $124.74 per cwt on a live basis.  No heifers have sold on a live basis.  On a dressed basis, 1,058 steers have sold at an average of $201.47, and 116 heifers have changed hands at $201.31.

The markets traded in a wide range last week from mostly $133 to $135 per cwt, while on a dressed basis, prices were mostly $204 to $206.  In the Corn Belt, cattle traded at $130 to mostly $131 live and $205 to $208 dressed.

Wholesale beef prices Wednesday were lower, with the USDA choice cutout at $214.81 per cwt, down $1.76 on the day, and its select cutout at $204.19, off $2.75.

The choice/select spread widened to $10.62 from $9.63 on Tuesday, and there were 142 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Tuesday was $184.20 per cwt, down $1.68.  This compares with the Nov settlement Wednesday of $174.85, up $3.30.