A cattle industry analyst says this spring’s unexpected cattle market turnaround bodes well for the future of the industry.
Nevil Speer, CEO of Agri-Clear, was the keynote speaker at an Iowa Cattlemen’s Association regional BeefMeet event in Creston this week. He says the fact that this spring’s cattle market rally was driven by increased consumer demand for beef is a very positive sign.
“What’s exciting about that is, it didn’t just happen. It’s not a fluke,” Speer said. “It really was driven by consumers – consumers continue to come back to beef. They have increased demand for this product, especially at the high end. We’re ‘de-commoditizing’ the beef industry and it’s paying dividends.” Speer points to two positive indicators that the increase in demand is “real.”
“(One) is what’s gone on with the rib. Wholesale rib was in a very clear downward channel. But, it completely changed direction this spring and has been very supportive to the cutout. So we’re seeing demand at the very high end,” Speer said. The other positive indicator, according to Speer, is the new record for the choice-select spread, at a higher level of beef production versus last year’s record high.
“That is clearly a very positive sign for demand. We’re moving it up and to the right. That means higher prices and more revenue ultimately coming into our business,” Speer said. The challenge, Speer added, is to keep producing high quality beef that’s increasingly consistent.
In addition to Tuesday’s event in Creston, the Iowa Cattlemen’s Association hosted regional BeefMeet events earlier this month in Dubuque and Ottumwa. Another BeefMeet is scheduled for today in Le Mars.
(Reporting by Ken Anderson, Brownfield Ag News)