Weekly US Cattle Outlook - Beef Demand Shows Growth
US - Weekly Cattle Outlook, 1st June 2007 - Weekly review of the US cattle industry, written by Glenn Grimes and Ron PlainBeef demand at the consumer level showed a growth of 20 percent from 1998 to 2004. Following this growth period, beef demand declined by 7 percent from 2004 to 2006. In other words, per capita beef demand in 2006 was up 11.6 percent from 1998.
For the first four months of 2007, beef demand at the consumer level is up slightly showing a gain of 0.2 percent from a year earlier.
Live-fed-cattle demand also has shown growth in the last decade. In 2003, live-fed-cattle demand was up 19.1 percent from 1998. However, 2004 was a soft year for live-fed-cattle demand, but there was some growth in live-fed-cattle demand in both 2005 and 2006. In 2006, live-fed-cattle demand was 15.4 percent stronger than in 1998.
Both consumer beef demand and live-fed-cattle demand have performed quite well in the last decade.
For the first four months of 2007, live-fed-cattle demand is up 3.7 percent from 12 months earlier.
The reason live-fed-cattle demand was weak in 2004 compared to 2003 was that beef exports in 2004 were down sharply in 2004 due to B.S.E. The stronger growth so far this year in live-fed-cattle demand compared to consumer beef demand is because of larger exports and smaller beef imports.
Even though beef demand has performed very well in the last decade, beef demand in 2006 was still down 21 percent from 1985. The major reason for the weakness in beef demand in the late 80s and earlier 90s was probably due to beef quality and health concerns. The most recent ten years have seen improvement in both of these factors.
Pork demand at the consumer level for January - April was down slightly 0.2 percent from a year earlier, and broiler demand was down 5.1 percent from 12 months earlier but improved from the first three months of the year.
There was no feeder cattle sale this week on Monday at Oklahoma City because of the Memorial Day holiday.
Fed cattle prices for the week through Thursday for the five-market area at $92.55 per cwt were down $2.10 per cwt from a week earlier. The average weighted carcass price through Thursday was down $3.30 per cwt from seven days earlier at $147.20 per cwt.
We believe the high for fed cattle prices for the spring of 2007 is history. However, fed cattle prices are expected to stay strong relative to history.
Wholesale beef prices Friday morning showed Choice beef at $154.99 per cwt, down $3.06 per cwt from a week earlier. Select beef prices were down $2.57 per cwt at $145.37 per cwt from seven days earlier.
Cattle slaughter for the week was estimated at 609 thousand head under Federal Inspection, down 0.8 percent from a year earlier.
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