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Beef Demand Projected To Remain High

published: September 16th 2011
source: KBTX

Increased exports of beef, combined with a short supply in the U.S., has made the outlook for future prices look relatively stable for the next few years.

"Beef exports are going to be record high. Higher than pre-BSE. Highest volumes we've ever shipped. Global demand is very good. Global supplies are very tight. We've had four years now of consecutive year over year decline in beef production. You look around the globe, we're hitting what, six point seven billion people on the globe. We're going to nine billion by 2050."
 

Brett Stuart is an analyst for Cattle Fax and offers these throughts.

"I think we have great years ahead. That's one of the messages I want to make today is, look at the global supplies, look at global demand, look at per capita income. We have some very good years ahead, and you'd better wire that in, that $1.40 to $1.70 calf price , that's where we're going to be spending the bulk of our time in the next five, ten years," said Stuart.

Beef supplies are projected to be well short of demand for the next few years.

"We couldn't over supply the beef numbers in the U.S. today 4 years from now if we tried, so that tells me for the next four years at least we're going to have tight supplies."

"So  I think that's very positive for a cow-calf guy to sit down and dial that in and say, even if we expanded next year we're still 5 years from additional production. You run a net present value on a cow that you say I keep this cow and I know for 5 years we're going to have very tight supplies and maybe beyond, that says it's worth the investment to put into those cows to get them there."

Some Texas producers are moving their cows.

"If there's a way you can stay in business and keep cows on the ranch, I mean I know that the options are very limited when you're in the situation you are here, but I'd be looking north, I'd be looking for grass anywhere. Don't get rid of the cows yet."