Assuming reduced supply, can beef demand remain resilient throughout 2023?

– Dr. Andrew Griffith, Assistant Professor, Department of Agricultural and Resource Economics, University of Tennessee

A question was asked this week concerning beef supply and demand in 2023, which is an appropriate question given the reduced cattle inventory.

It seems certain domestic supply of beef will decline in 2023 relative to 2022, because there should be fewer animals making their way through the fed cattle system and a reduction in non-fed slaughter. However, feedlots will likely attempt to support domestic supply by feeding cattle longer and harvesting cattle at heavier weights. It is unlikely heavier weights will make up for the reduced slaughter, which means the market is likely to see an increase in the quantity of beef imported.

The demand side is a little less certain. Consumers have been resilient with beef demand through this period of inflation and higher interest rates. How much longer they can remain resilient may the biggest question for the industry to answer. With supplies expected to decline, there is a good chance beef prices will push higher, but it is unknown if it will be high enough to temper beef demand.