What Will the Pork and Beef Markets Do in 2023?
There’s no question the pork and beef markets indicate consumers want more pork and beef.
“It's been a good ride on the demand side. Let's hope it continues as we look forward,” Scott Brown, ag economist at the University of Missouri, told AgriTalk’s host Chip Flory.
From a demand standpoint, Brown said there are two things that concern him looking forward.
“Number one, with these higher interest rates, we talk about what it means for borrowing money for producers. But I worry about it choking off consumer spending on food products. And secondly, continued concerns about the general economy and what that means in 2023. If real GDP contracts, as many are suggesting it will now, do we find ourselves where demand isn't as strong as we've been experiencing?”
Beef Supply
Both beef and pork export sales have been outstanding this year, but beef exports have been spectacular, Flory said.
Consumers outside the U.S. are beginning to see what real good grain fed beef tastes like, Brown said. “And once they've had that taste, they want more,” he added.
“American consumers figured it out, too,” Flory said. “During the pandemic, they were staying home and buying good choice and prime beef. It feels like we may have a shortage of choice and prime beef in the marketplace right now.”
Brown agreed and said looking forward into 2023, he expects even tighter supplies.
“It's going to get tougher and tougher to find quality beef, I think, going forward,” Brown said. “Drought is a big part of what we have going on, but let's not forget lack of profitability also factors in. I think in some places, you have producers who are deciding, ‘Hey, I can grow corn and soybeans at these prices, maybe better than I can raise cattle.’”
He said the number of heifers being slaughtered today and the number of heifers in feedyards tells him the beef industry is not building back anytime soon.
“I think a big change is coming to the structure, at least on the cow-calf side of the industry that's typically been made up of a lot of small producers. We may wake up a few years down the road here, Chip, and find it much more consolidated, similar to some of the other industries that we've talked about in the past,” Brown said.
Pork Supply
There’s not a lot of expansion and build taking place in the pork industry now, Brown said.
“It seems to me that we've found a happy medium,” he said. “I don't know if that was by luck or by design. But, slowing what was once a very strong growth to really kind of match what I see available in terms of processing capacity, etc. To me that sideways spells some better opportunities for prices in the year ahead.”
Brown believes exports could grow on the pork side as well, as he looks forward, resulting in some good opportunities for the U.S. pork industry in 2023.
Read More:
Pork Exports Continue to Climb Higher While Pace Cools for Beef in September
