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Beef prices in the US market to jump in 2021

Beef

The decrease in cattle inventory may result in a spike of prices for the second half of 2021, Rabo AgriFinance analyst warns.

Posted on Dec 11 ,09:30

Beef prices in the US market to jump in 2021

The disruption in beef supply chain in the US market may last until early April next year as a second-wave of COVID-19 infections is hitting the North American country, warned Don Close, senior animal protein analyst at Rabo AgriFinance. In his opinion, the prices will increase in the second half of next year as the cattle inventory are expected to drop. "We have a large inventory of cattle in place for the first and early second quarter (of 2021). But because of the contraction in cow inventory we’ve had for each of the previous two years, the calf crop going forward is smaller. We could be setup for a counter-seasonal year where we don’t see the highest prices (for fed cattle) in March and April. As fed cattle supplies tighten (in 2021), we could actually see third and fourth quarter (2021) prices exceed our second quarter highs," he commented on AgriTalk show.
However, one question that remains to be answered is the herd liquidation in front of the expanding drought conditions across the western United States. "It may further accelerate the liquidation of cows. I’m not sure that’s all bad, because it will get us to the bottom of this cycle in the market faster," said Mr Close, noting that may also limit the spike in prices.

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