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southern MN | Beef takes 2 years to react to market demands.
When the economic virus bubble hit, we were expecting poor economy, poor demand for expensive meats.
Instead folk got a lot of cash pumped at them and still needed to eat, so they ramped up beef consumption, sitting at home the backyard grills got a workout.
As beef prices rose to fill demand, producers were still scared of economic disaster and happily sold out cattle inventories for a good price, they didn’t try to build up more heifers/ cows/ calves.
Several years down the road, demand for beef has held up amazingly well, and producers continue to sell out any beef they can for a really good price. A bird in hand….
So no one is keeping extra beef cows around to have more calves so that there are more beef animals available to sell 2-3 years from now.sell today, you would be a fool not to!
The price today is great, the risk of holding on to those heifers and waiting 2-3 years to see if you can still get a good price that many years from now is too high.
And so the short beef supply cycle will continue until consumers quit buying beef.
And then it will be hard times. Beef producers will have to liquidate, creating a very low beef price and oversupply on the shelves. And an even smaller beef herd.
Not really a bright future in the beef world, but it is just rocking ‘for today!’
Paul | |
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Why is beef so high in the grocery store?
