Beef prices have been struggling for several months. The beef industry is used to seeing the market hit a major low in years that end with six, according to Julianne Johnston of ProFarmer. However, without a surge of beef moving off shelves in the retail sector, she says prices will have a hard time rebounding in 2017.
“I think we have put a bottom in for the short term,” Johnston says. “We have some indication that the herd rebuilding cycle is slowing.”
According to Johnston, there has been some improvement in the cash cattle market in the Plains states. Packer margins became profitable and boxed beef prices started improving. Maintaining that momentum relies on retailers she says.
“The retail part of the market is what concerns me the most,” she says.
The market has seen a sharp decline in boxed beef prices, but those prices haven’t translated to the grocery store shelf which would encourage consumers to buy more beef.
“Beef prices aren’t as competitive in the case as poultry or pork,” she says. “To get consumers to buy more beef we need to see lower prices.”
If you’re a producer hoping to make a profit in the next couple of months, Johnston advises watching the market and taking advantage of hedging opportunities as they arrive.