During the first quarter of the year the nation was abuzz with news coverage of the beef shortage as record high prices were hitting consumers in the pocket book at the store.
The shortage was blamed on drought the year before, a fiercely cold winter, and of course the end result was less animals going to the sale barns. This in turn meant less animals going to the slaughterhouses or in some cases smaller animals going to slaughter so producers could take advantage of the high prices. All of these factors drove up prices per animal and the price per pound in the store.
As we are nearing the end of the fourth quarter, the shortage has continued and may take several years to overcome, but the news coverage has died down. Consumers have been paying the price without much fuss since then. Producers on the other hand still have to figure out how to meet consumer demand.
It’s a hot issue for local and national producer associations and will be the lead topic at many mid-winter cattlemen meetings. Producers will figure out the best economic strategies for increasing the herds without increasing their debt margins. New producers will enter the market with the price per pound luring them into the market. As we’ve seen with other agricultural issues of supply and demand, like the corn market, this will drive prices down which is a good thing for consumers. Just how long it will take the beef market to reach equilibrium will be part of the market forecasts in the coming months and probably years.