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Slowing economy could pressure beef demand

Real Gross Domestic Product is projected to decline for just the second time since 2009 and an ag economist says that could be bad news for beef demand. 

University of Missouri’s Scott Brown says as the cattle industry continues its contraction heading into 2023, higher prices should be a no-brainer.  But, Brown says this kind of general economic outlook could take the shine off of what otherwise could be a pretty good year for cattle prices.  

He tells Brownfield prices are around $25 a hundredweight higher than they were a year ago and producers shouldn’t wait to manage their risk.  “I want to highlight this general economic situation is one thing that could derail that,” he says.  “So let’s not get into the mindset of ‘I don’t need to do price risk management because prices are going to go higher’, because that may not always be the case.”

Brown says risk management will vary by operation.  “Figure out how much risk you can handle,” he says.  “And maybe let someone else own some of that risk.”