US Beef Demand: The Risk of Recovery

The optimistic anticipation of a post-pandemic world continues to intensify with the ongoing distribution of Covid-19 vaccines. From a beef industry perspective, virus control will relieve much of the current strain on the processing and distribution sectors. Throughout the next several years, innovations accelerated by Covid-19 will go live, as well as technological advancements across the supply chain. Simultaneously, tighter cattle supplies from a declining beef cow herd will come to fruition. Overall, the beef industry’s production scenario seems poised for post-pandemic improvement. But what of consumer beef demand?

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“Post-pandemic, Rabobank expects domestic US beef demand to retreat from the all-time highs realized throughout 2020. The extreme late-spring spike in retail prices can largely be explained by the reduced availability of beef and other meat products following the well-documented, Covid-19-induced supply chain disruptions,” according to Dustin Aherin, Analyst – Animal Protein.

However, the elevation of beef demand, which accounts for both supply and price, indicates that higher beef prices have resulted from more than just supply changes, particularly with meat supplies recovering in recent months. “The exact circumstances that fostered beef demand’s incredible strength during the pandemic also foretell potential vulnerabilities during the post-pandemic recovery period.”