Don’t look for retail beef prices to come down any time soon.
That was part of the message from an industry expert Tuesday at the Colorado Farm Show in Greeley.
Tyler Cozzens, an economist for Livestock Marketing Information Center in Lakewood, told a small crowd of about 70 people that cattle prices finished strong in 2024 and look to remain strong throughout the coming year. That translates into higher prices in the local supermarket.
“Retail beef prices will stay high, but demand is very strong,” Cozzens said.
While issuing the usual caveats that “anything can happen,” Cozzens presented a fairly rosy future for the beef industry. If corn and hay prices stay where they are and if consumer demand remains high and if climate changes don’t happen too quickly, beef producers should enjoy a profitable 2025.
Cozzen’s predictions are based on a number of factors, which he outlined on Tuesday. Generally speaking, beef cattle are getting bigger and attracting better prices than ever before.
“We’re doing more with less,” he said. “(Cattle) inventory is the lowest since 1950 but beef production is the highest it has ever been. We are feeding more people with fewer cattle.”
That mirrors claims going back as far as 2019 when the University of California at Davis issued the same declaration, citing better feeding practices and improved genetics throughout the industry.
Consumers have a direct impact on beef supplies. Cozzens noted that cattle on feed over 90 days and over 120 days indicates an industry response directly to consumer demand. He displayed a graph that shows numbers peaking in the spring and then steadily declining through the rest of the year. That, Cozzens said, is directly related to seasonal demand.
“The seasonal rise of cattle on feed during the spring aligns with peak beef demand during the summer grilling season, which is approximately from Memorial Day weekend through Labor Day weekend,” he said. “This highlights the cattle and beef sector positioning cattle in the supply chain to meet the peak demand during this season.”
Data points toward ranchers rebuilding their herds, Cozzens said, and that indicates optimism in the industry He said the number of heifers as a percentage in feedlots is down below 39 percent, which would indicate that stockmen may be holding back heifers to enlarge their herds.
“During the last rebuilding phase in roughly 2014-2016, heifers on feed as a percent of total cattle on feed dipped to about 31 or 32 percent,” he said “So, from an analyst’s perspective, heifers on feed as a percent of total cattle on feed moving consistently below 38 percent would start to point towards producers retaining heifers to rebuild the cattle herd.”
Still, there are adverse conditions on the horizon. While existing stocks of corn and hay are plentiful, continuing drought through the nation’s midsection could affect future supplies. Forty-three percent of the nation’s corn-producing area and 36 percent of hay-producing area is expected to suffer continuing drought conditions. If that pattern persists long enough, it could drive feed prices back up.
Consumers could pose a problem as well, not just for the livestock industry but all across the economy. Americans, flush with cash from government COVID relief in 2020 and 2021, went on a spending spree that hasn’t abated much, even as the dollars ran out.
The U.S. Bureau of Economic Analysis shows that Americans were socking away as much as 30 percent of disposable income into savings in 2020 and as much as 25 percent in 2021. A year later, however, consumers had burned through their savings and were putting less than 4 percent of their income into savings accounts. Statistics from the Federal Reserve Bank of New York show that, at the end of 2024, Americans held $1.2 trillion in credit card debt, an historic high, and 11 percent of home mortgages were 90 or 120 days delinquent. And inflation – which Cozzens attributed to the continuing effects of the pandemic – continues to pull dollars out of consumers’ pockets.
Cozzens believes beef producers should continue to see a profitable 2025, however.
“Every week this year we’ve seen new record prices (for beef cattle),” he said. “We’re seeing over $200 per hundredweight, and the futures are staying strong.”
