Beef production in the United States is expected to decrease 4.8% in 2013, the second largest year-over-year decrease in 35 years, trailing only the 6.4% drop in 2004.
The reason is a combination of mostly steady carcass weights and a projected 5% or more decrease in cattle slaughter, said Derrell Peel, Oklahoma State University Cooperative Extension livestock marketing specialist.
He said that many analysts expected the 2013 numbers to be followed by a 2014 decrease of 4.5% or more. These two years would represent the largest percentage decrease since the late 1970s.
The pressure for higher boxed beef prices will increase significantly with an expected 4.5% decrease in beef production in the first quarter of 2013. Choice boxed beef should move above $200 per hundredweight in the next few weeks. Beyond that, Peel believes it will be a question of how much and how fast retailers can pass along the higher wholesale prices to consumers.
Cattle and calves represent the number one agricultural commodity produced in Oklahoma, accounting for 46% of total agricultural cash receipts and adding approximately $2 billion to the state economy, according to National Agricultural Statistics Service data.
Source: Oklahoma State University