Can Meat Demand Pull Additional Beef and Pork Supplies Through 2019?

Meat cases are getting fuller, with livestock and poultry production continuing to expand. And all those extra animals mean there’s continued demand for feed supplies in 2019. ( AgWeb.com )

Meat cases are getting fuller, with livestock and poultry production continuing to expand. And all those extra animals mean there’s continued demand for feed supplies in 2019.

“We're anticipating continued growth in all of the meats—beef, pork and poultry in 2019,” Derrell Peel told Chip Flory on AgriTalk Thursday. While the year-over-year pace might be a bit more modest than we saw in 2018, feed demand is likely to tick up as a result in the new year.

 “Pork production is probably growing the strongest across the board,” Peel said. “Beef numbers are beginning to moderate a little bit, although the Dec. 1 Cattle on Feed inventory was the highest we've had since 2007. So, we're working with significantly bigger numbers than we've had in the cattle industry for some time.”

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Greg Henderson, editor of Drovers.com, said it’s no surprise there will be more meat and poultry supplies in 2019. With pork growth estimated to be up 5% and beef up 3% this year, “we're putting a lot of meat in front of consumers and demand has got to hold,” Henderson said.

“One of the estimates that I saw on economic growth here in the U.S. 1.7% GDP growth. I would I think it's a little conservative,” added Chip Flory, host of AgriTalk and economist for Farm Journal. “And it would suggest that while we have seen excellent demand for red meat here in the country, that it might start the back off just a little bit.”

How will this affect feed demand?

Feeding decisions will hinge on profitability, Henderson says.

“Pork producers are right at breakeven right now. Beef producers are making about $100 a head for cattle coming out of the feedlots. If you look at the closeouts right now, just the grain prices are about $25 per animal more than a year ago,” he added.

Beef Profit Tracker: Feeder, Packer Margins Steady

Pork Profit Tracker: Margins Even Tighter

“The thing that has driven the price of total feeding up is that feeder cattle prices have not come down any. We will probably see those feeder cattle prices come down a little if those margins tend to continue to tighten,” Henderson says.

“So I think the grain demand is basically based on how the pork producers and the beef producers fair with their finished product.”

Related Content: Listen to the full episode of AgriTalk

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