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USDA expects tighter beef supplies for 2023

In its latest Supply and Demand report, the USDA projects a nearly 2-billion-pound decline in beef production next year, and University of Missouri’s Scott Brown says that’s good news for prices. “The USDA says fed cattle or slaughter cattle prices are around $1.53 for 2023,” he says.  “That’s 9% higher than the $1.40 they have projected for 2022.”

And even with higher prices, Brown says he doesn’t anticipate a huge swath of consumers switching from beef to either pork or chicken.  “All of these meats are less of a substitute than they were historically,” he says.  “The days of us going to the counter to decide what we want to purchase for meat, that’s much less normal.  Today we make the decision of which restaurant we go to and that almost picks the meat protein that we want.”

However, the USDA did increase pork production in 2023 and lowered prices.  Brown says that could lead to a small shift in consumption.

He says the rise in beef cow slaughter and earlier placements two big factors that lead to the USDA’s 2023 beef production projection.  Brown says that happens if beef cow slaughter slows down because the industry can’t slaughter cows forever.  And secondly, he says, the idea that the industry has been pulling cattle forward for an extended period of time and there could be much weaker placements as we continue into 2022.