I love the profit potential in the beef market complex but I worry about producers who don't have risk protection.

July 21, 2014

1 Min Read
Record Beef Prices Giving Me The Jitters

I continue to have doubts about the robustness of beef demand in the face of record-high beef prices.

Don't misunderstand: I'm tickled to death about the room for profit margin in these prices. I just fear that any moment the consumers will cut back on their protein consumption. It wouldn't be the first time, after all.

I think I should lay out some facts I've been gathering, however.

Many things look good for beef. For example, the lack of competition. Neither pork nor chicken producers have mounted much of a response to high prices yet. The pork industry has been struggling with porcine epidemic diarrhea virus (PEDv) and I think that has kept them at bay to some degree. But I was looking at the June USDA reports on chicken and their production is almost flat, too, despite record chicken prices.

The June 25 report from National Ag Statistics Service says total broiler slaughter is down 3% from 2013. The poultry producers were not increasing hatching of broilers at the end of June, either. Broiler growers in the U.S. weekly reporting program placed 174 million chicks for meat production during the week ending June 28, which was down slightly from a year ago.

To read Newport's entire column, click here.


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