June 2024 WASDE: Bullish for Beef Market
The June 2024 World Agricultural Supply and Demand Estimates (WASDE) report brought some surprising news for the beef industry. Let’s break down the key points regarding beef supply, demand, and prices:
- Supply: The USDA US beef production for 2024 estimate remained virtually unchanged from the previous report. However, there were adjustments within the year. Expected slaughter is down, but this is offset by higher dressed weights of cattle.
- Demand: No changes were made to beef trade forecasts for 2024, with imports and exports holding steady.
Price: This is where things get interesting. The USDA actually raised cattle price forecasts for 2024 compared to the May report. This seems to contradict the lack of change in supply and demand. Here’s what the report suggests:
- Recent strong cattle prices influenced the upward revision.
- Potential market tightening in the second half of the year due to a faster pace of finished cattle marketing could be a factor.
The recent USDA reports also offered some insights for 2025:
- USDA expects larger expected feeder placements in the fourth quarter of 2024 could lead to increased beef production in 2025. However, tight feeder cattle supplies will likely limit feedlot placements and suggest a very tight US beef supply over the next eighteen months.
- The strength in cattle prices from 2024 is expected to carry over into 2025. The need to rebuild the US cattle herd in 2025 will likely require higher beef prices to restrict domestic beef consumption and net export trade.
| US Beef Supply/Usage (Million Pounds) | |||||
| Annual | 2021 | 2022 | 2023 | 2024 | 2025 |
| Beg Stock | 716 | 676 | 723 | 638 | 585 |
| Production | 28,007 | 28,358 | 27,032 | 26,657 | 25,784 |
| Imports | 3,375 | 3,391 | 3,727 | 4,171 | 3,768 |
| Exports | 3,447 | 3,536 | 3,038 | 2,818 | 2,707 |
| End Stocks | 676 | 723 | 638 | 585 | 517 |
| Per Cap Use | 58.9 | 59.1 | 58.1 | 58.3 | 55.4 |
| Finish Cattle $ | $122 | $144 | $176 | $184 | $189 |
| USDA June 2024 Data | |||||
We have included a scatter study displaying the annual average prisces of finished steers as a function of the per capita domestic beef supply expressed in pounds per person. The points for 2024 (green) and 2025 (red) are USDA forecasts. Cattle prices have been adjusted for inflation based on the implicit deflator for personal consumption expenditures.
Overall, the June WASDE report presents a bullish picture for the beef market. While supply and demand remain balanced, as is always the case with a perishable product , price forecasts needed to achieve this balance were revised upwards extending recent market trends. The outlook for 2025 suggests continued tight beef supplies and potentially strong live cattle prices.
Note: All of the price assumptions in this post are LACO’s and may or may not agree with USDA.