UK agriculture experts say beef industry is more stable a year into pandemic
LEXINGTON, Ky. (WKYT) - After a rollercoaster year for the beef industry, a local expert said he expects more stability in 2021.
In the early months of the pandemic, many processing plants shut down. Following that, there was a meat shortage and prices jumped.
“We had some shutdowns and some labor issues at processing plants,” UK extension economist Kenny Burdine said. “That led to a backlog of cattle and a short run decrease in beef production.”
Burdine said a higher demand in 2021 will help the beef industry. He said, with restaurants back open, offering outdoor dining, more beef will be sold.
“Food service demand is really a key piece in the beef demand puzzle,” he said. “That’s what I think everybody expects to pick up throughout 2021.”
Warmer weather means grilling season, which is also a time when sales peak.
Burdine said there will still be a lot of catching up to do this year.
“It took us a long time to work through the backlog of cattle. We did in fact push some, what would’ve been 2020 production, into 2021. Supply of beef this year will be comparable, I think, to 2020,” Burdine said.
Burdine said, on average, about 10-13% of beef is exported. He said so far this year, those exports are looking good.
“We’re moving more beef overseas and that always has a positive impact on price,” he said.
He said one negative of the 2021 cattle market is the high cost of grain, and said corn has doubled in price.
“Corn price has basically doubled from where it was this time last summer, which it just a difficult pill for a lot of folks to swallow,” he said. “There’s always production aspects of it, but this time I think it’s something more to do with demand, particularly exports of corn.”
Burdine said, this, in turn, adds to the cost of cattle operations.
“The majority of our cattle actually leave the state and are put on full feed somewhere else,” he said. “As the cost of feed rises, the cost of those downstream entities that are finishing those cattle goes up and it makes our cattle less valuable here in the state.”
He said, despite fallout from the pandemic, consumers could potentially better sticker prices come summer and fall.
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