Beef production in the U.S. will reportedly to drop by 4.8 percent in 2013, the second biggest drop in 34 years.
Based on carcass weights and a projected 5 percent or more decrease in cattle slaughter, Derrell Peel, Oklahoma State University Cooperative Extension livestock marketing specialist predicts that 2013 will experience a 4.8 percent drop in beef production compared to 2012 production.
"Many analysts expect the 2013 numbers to be followed by a 2014 decrease of 4.5 percent or more," he said. "These two years would represent the largest percentage decrease since the late 1970s."
When compared to 2011, 2012 also saw a 1.1 percent decrease in production with a 3.3 percent decrease in cattle slaughter, but the percentage of decrease in 2013 is the second-largest drop in 35 years, coming second to the 6.4 percent decrease in beef production in the year 2004.
However, Peel said consumption of beef in the U.S. is not a large factor to this decrease and per house consumption will largely have to depend on the exports and imports of beef products.
"In 2013, per capita beef consumption is expected to drop 3.5 percent, less than the production decrease because beef imports will increase and beef exports will decrease," Peel said. "The decrease in per capita beef consumption in 2013 should be similar to the year-over-year decrease in 2011 compared to 2010."
In 2011, domestic per capita consumption decreased by 3.8 percent which was adjusted by a large number of exports, even though there was a minimal decrease of production.
"Beef consumption may drop more sharply in 2014 with a 5 percent decrease in per capita consumption compared to the lower 2013 level," Peel said. "Furthermore, these decreases in beef production and consumption almost certainly imply higher wholesale and retail beef prices, although other factors will impact the price response to lower supplies.
"In 2011, a similar decrease in beef consumption resulted in a 15 percent increase in boxed beef prices and a nearly 10 percent increase in retail prices," he said. "Total meat consumption decreased about 2 percent in 2011 and a similar 2.1 percent decrease is expected in 2013 with both pork and broiler consumption expected to drop approximately 1.5 percent each."
The price of boxed beef will invariable increase significantly because of the expected 4.5 percent decrease in beef production in the first quarter of 2013.
