Beef Market Predictions – 2021 and Beyond

2020 has been an eventful year for so many reasons and the beef market/industry has not been unaffected. The need for data-driven projections has never been greater which is why we have assembled a brief market outlook based on some of the most reliable industry sources.

According to USDA’s Livestock, Dairy, and Poultry Outlook (LDP-M-319), 2020 beef production will likely stagnate at around 27.2 million pounds compared to 2019 and the USDA expects the same production level for 2021. This stagnation is driven by expectations of slightly higher 2021 feeding costs and fewer fed cattle supplies in the end of 2020. When it comes to international factors, November 2020 saw reduced imports from major markets in Australia and Mexico, but strong import growth from smaller markets like New Zealand and Brazil.

The following chart shows the 2019 beef production and compares it to 2020 and 2021 projections of quarterly production. Even though second quarter of 2021 will make up a slump in the first quarter of 2021 compared to the same period in 2020, an expected decrease of production in quarters three and four will lead to a stagnation of the 2021 U.S. beef production.  

The next chart displays the 2015-2019, 2020, and forecasts 2021 per capita disappearance of different sorts of meat. Per the USDA, “Availability is the disappearance on the domestic market of what remains after exports and ending stocks are subtracted from the sum of production, beginning stocks, and imports. Dividing this amount by the U.S. population yields per capita disappearance.” While figures for poultry are stable, the per capita disappearance of beef and pork is expected to slightly decrease in 2021.

The Food & Agricultural Policy Research Institute of the University of Missouri even reveals 5-year projections  (2020-2025) in their Baseline Update for International Dairy, Livestock and Biofuel Markets (FAPRI-MU Report #06-20). They expect the U.S. to return to its place as a beef net exporter beginning in 2021 and then extending through to 2025. International beef production, as well as consumption, is growing and the U.S. will defend its renewed competitive standing. These projections have changed throughout 2020, which is why it is always advised to compare them to earlier projections to get a better feel for the market fundamentals.

As always, market predictions need to be enjoyed with a grain of salt. We recommend taking advantage of industry events like The Virtual BEEF Experience between February 1^st and 4^th or the 2021 Agricultural Outlook Forum on February 18^th and 19^th. Also feel free to reach out to your committed team of industry experts at High Choice Feeders.