-Farm News photo by Karen Schwaller
U.S. cattle producers are producing more beef with less animals, according to Karl Setzer with Consus Ag Consulting of Grand Ledge, Michigan.

U.S. cattle producers are producing more beef with less animals, according to Karl Setzer with Consus Ag Consulting of Grand Ledge, Michigan.

“In the last couple of years we’ve seen some consolidation in the U.S. cattle herd, and some culling take place. As a result, we’ve seen more cows and heifers make their way into the slaughter lines,” he said.

Setzer said cows don’t dress out as high as steers do because of genetics.

“In the last several months we’ve started to see the number of cows being slaughtered decline, and as a result we have more steers coming in on a percentage basis, so our beef production per head is up 26 pounds from a year ago,” said Setzer. “We’re getting more beef from the animals we’re slaughtering.”

He said all marketing year, U.S. beef production has trailed by about 4 to 5 percent, so right now it’s down to 3 percent.

“Since we’re getting more beef produced on fewer animals, the slaughter numbers aren’t a good indicator of the beef being produced,” he said, adding that the USDA is projecting total beef production for 2024 to be down 510 million pounds from what was produced last year.

“But we have to take that with a grain of salt because our exports are not down as much as our beef production. Our exports for 2024 are estimated at 2.8 billion pounds, which is down only 233 million pounds from last year, even with this smaller herd,” said Setzer.

He said U.S. consumers now want the cheaper, leaner cuts of beef such as sirloin, which he said has made a shift in the overall demand on the market. Now, he said, the U.S. is exporting the higher quality cuts like prime rib. He said imported beef cuts coming in are leaner cuts, and the U.S. diet has shifted in that direction.

Setzer said retailers and restaurants are working toward giving consumers what they want in leaner beef cut choices. He said the U.S. is seeing more beef demand through restaurants than at grocery stores currently due to higher prices of beef in the grocery stores. He also said the Wagyu beef industry is suffering today due to lack of demand for that product.

“The U.S. is exporting the higher cuts of meat and importing (shipments) of 90 percent lean beef into the United States at record high rates,” said Setzer. “It’s new that we’re seeing the import volumes we’re seeing, and the reason is the economy. We’ve never seen this before.” Setzer said Chinese year-to-date amount of imported beef (including U.S. beef) is 770,000 metric tons, with most of that coming from the U.S.

“The Chinese consumer wants beef,” Setzer said, adding that the Chinese people used to have a “mostly fish” diet. “When their economy improved a little, they started putting more pork in their diet, and now their economy is good enough that they can afford ribeyes and the higher cuts of beef. That is where the big draw in U.S. beef is right now.”

He said the U.S. receives lean beef imports from Canada and Latin America, primarily.

Setzer said the bird flu in dairy herds has turned out not to be a market issue, since beef and dairy markets have rallied since that news broke.

He said marketers will be watching pasture conditions out west and seeing if producers will keep their cattle on pasture longer, and said it could result in heavy weights increasing due to cheap feed grains.

Setzer said there are many positives in the livestock industry as a whole. He said cattle numbers remain down, but more beef is coming from them. He said the U.S. has shrunk the amount of red meat on supply, and that tighter supplies of cattle inventory have benefitted the futures market.

“The USDA average price projections on cattle is $185/cwt. That’s $9.47 higher than the (year-end) price of 2023,” said Setzer. “Some of that is from the cheaper feed grains — especially corn. It’s allowing producers to hold their animals a little longer.”

Setzer said the cost of feeder cattle are higher, but the cost to finish them out is less.

“A $9.47 higher return projected than a year ago — that’s a lot of money,” Setzer said. “I’m optimistic for the livestock market on the whole, but especially for beef, with global demand picking up and consumer demands shifting.”

Setzer said summer beef demands are coming full-speed ahead for beef producers, giving hope for a greater demand for their product.

“My crystal ball tells me consumer demand is going to be pretty good this year — at least I don’t see it dropping off from where it is right now with the higher values,” he said. “That doesn’t mean we won’t have ups and downs, but I think we’ll hold our cattle values together pretty well for where we’re at right now,” he said.

He said looking at the cattle inventory and when (and to where) the animals are moving, and projected and reported weekly exports — all come together to tell Setzer there could be a good summer ahead for beef demand.