International demand keeps Texas beef prices stable

Though markets aren’t likely to take off in 2019, cattle experts believe an increasing global demand for beef should keep prices steady.

Jason Johnson, an economist for Texas A&M AgriLife Extension Service, said herds are likely near the end of the growth period that followed the 2012 drought. As supplies have grown, he said the growing international demand has kept prices from taking too big of a hit.

“One of the main reasons why prices have held as well as they have in the face of additional supply is undoubtedly the success we’ve had in the export market,” Johnson said. “It can’t be reiterated how important that market has been. While the demand in the U.S. has been very strong, it is the export market that has allowed us to absorb that additional supply that has come online.”

Though the markets likely won’t take a dip, Johnson said producers shouldn’t expect a major surge either.

“We’re not in a position where we can expect a giant rally because of the excess supplies, but we’re not in a position where those excess supplies are driving prices down further. We’re pretty much in a sideways pattern.”

In 2020, however, cattle numbers will start to drop and should inversely affect prices, he said.

“Next year, we should be able to talk a little more optimistically about the end of that cycle — the declining herd to come and prices going up,” Johnson said.

Jason Cleere, a Texas A&M University beef cattle specialist, said international markets will continue to drive prices in the United States.

“Ninety-six percent of the world’s population lives outside of the U.S. When you talk about economic power, the U.S. is extremely powerful, but we also have to look at opportunities around the world,” Cleere said. “When it comes to beef, the export markets play a big role in the process we see in our cattle.”

He added that the U.S. has a reputation of quality products that it can use as leverage in the international markets.

“The advantage that we have with American beef is the overall quality. That’s a selling point we have to make,” Cleere said.

Source: https://animalscience.tamu.edu/2019/01/11/international-demand-keeps-texas-beef-prices-stable/  

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