We are coming up on two of the biggest holidays of the year and consumers are rushing to big box retail stores and local mom-and-pops to purchase all their dinner table essentials. What they end up making their main protein will have a sizeable impact on the market as we round out the end of the year – and we all hope beef will take center stage for many of them.
While Thanksgiving, Christmas and New Year’s might not be traditional grilling holidays with traditional beef fare, these big events mark the rise of at home cooks and people willing to splurge on specialty products and higher end cuts to impress guests and test their kitchen skills. During the 2022 holiday season, which was marketed with increasing inflation similar to what we’re seeing now, more families turned to dining in-home as opposed to dining out according to a report from the University of Illinois.
There’s no doubt this time of year can have a big impact on the beef industry both on the national food chain level and small-scale producers.
State of the Beef Market in Late 2023
The reality is that food prices are high across the board this year. Some argue this is due to both artificial inflation and higher costs of production and transport. Beef prices are certainly not immune to this, but there are also many other very tangible reasons they’ve been high.
“Cattle producers are taking advantage of the much stronger cattle prices this fall. In numerous meetings this fall, producers have indicated to me that they are selling the majority of steers and heifers; in part to capitalize on higher prices, and in some cases, because of continuing drought and pasture and hay limitations which are making additional sales necessary,” writes Derrel Peel, Oklahoma State University Extension Livestock Marketing Specialist, in an article for Feedlot magazine. “Bigger feeder cattle (600 pounds and higher) prices have fallen about 9-10 percent since September, mostly under the weight of the huge market correction in Feeder and live cattle futures. Despite the recent decrease, prices for these heavier feeder animals are still 33-35 percent higher compared to the same time last year.”
Spellman also noted that feeder prices strongly influence live cattle imports, with Mexican feeder cattle imports significantly increasing by 45.9% in the first nine months of 2023 compared to the previous year.
According to University of Tennessee ag economist Andrew Griffith in a Missouri Farmer Today article, wholesale beef prices have shown limited movement in the last couple months. However, the daily price of Choice boxed beef has remained within the range of $300 to $308 for 35 out of the past 40 days, with a brief interruption on either side of these values. This is a typical occurrence during a period when beef consumption is not a primary focus.
“With the transition to November, beef will receive more attention heading towards the end of the year holidays,” he says. “The retail sector will be featuring turkey and ham the next few weeks leading up to Thanksgiving, but retailers, restaurants and food service entities will ramp up beef purchases before consumers have finished purchasing birds. One positive aspect towards beef is Thanksgiving being fairly early this year. This means there will be a longer window to move beef between Thanksgiving and the New Year.”
Naturally, higher end cuts in the retail and food service sectors will go up in response. Think of optimal rib and loin cuts and overall, Choice and Prime products.
Other Impacts on Market
But Griffith also cautioned that current high numbers of animals on feed may be a limiting factor for near term markets.
“Heifers on feed as a percent of total cattle on feed is at a record level, which could lead to even lower beef cow inventory,” Griffith told Missouri Farmer. “This information sounds as if it should support prices in the longer run as calf crops will continue to be smaller in 2024 and even fewer cattle to place on feed in 2025 if heifer retention is possible. However, in the near term, it will keep prices muted to some degree because there should be ample beef production in the next six to eight months.”
In 2021, the prices on consumers’ favorite meats saw an increase due to not only rising demand, but rather labor shortage. When holidays approach, the worry of cost and inventory shortages start to creep into suppliers minds due to the usual increased demand.
The 2021 holidays reflected that the most popular meat or protein was beef for Christmas Eve, ham for Christmas Day (with turkey a close second), and beef again for New Year’s Eve.
This is probably fairly consistent results, as most families have the same traditional dishes they serve around the holidays. However, with the inflation in recent years, trends could shift as families look to more cost-friendly options.
It’s hard to get a pulse on the specifics of direct-to-consumer and other specialty markets. Despite the higher cost of living this year, many holiday shoppers are still apt to look and buy locally for meals and food-related gifts. According to one survey by NerdWallet, 27% of holiday shoppers have said they will include more local and small business gifts in 2023. For beef producers who sell direct-to-consumer either online or off the farm, this could be an excellent opportunity to reel in a few extra dollars by running special promotions or offers for this demographic.
The state of the beef market in late 2023 reflects the challenges faced by cattle producers, with fluctuating prices driven by a combination of artificial inflation, production costs, and market dynamics. While the holiday impact on wholesale beef prices has shown limited movement in recent months, the transition into November signals a heightened focus on beef consumption leading up to Thanksgiving and beyond.
The retail sector is expected to feature turkey and ham, but the longer window between Thanksgiving and the New Year presents an opportunity for increased beef purchases. However, challenges such as high numbers of animals on feed and heifer retention may temper prices in the near term, despite potential positive implications for the future. The dynamics of holiday consumption, as highlighted in a study by agriculture economists, reveal a shift in preferences, with beef being a popular choice for Christmas Eve and New Year’s Eve.
As families consider their holiday meals amidst inflation, the traditional favorites may face competition from more cost-friendly options. Yet, the resilience of consumers supporting local and small businesses, as indicated by a NerdWallet survey, presents an optimistic outlook for beef producers engaged in direct-to-consumer sales. This holiday season, amidst economic uncertainties, the beef industry remains a dynamic player, adapting to evolving consumer preferences and market forces.
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