Grocery shopper across the U.S. may have noticed that a pound of hamburger has been a lot easier to afford for the past year, or so. Just two years ago a pound of ground beef was hovering above the $4 range, but today one can routinely find a pound hamburger for about $2.49.
Despite lower prices, cattle ranchers are optimistic and are growing their herds. In fact, in the latest USDA update it was shown that the number of cows and calves is up 1% from a year ago. As of January 2018, there are 94.4 million head of cattle held by American farmers.
When looking specifically at beef cows, the numbers are even higher. This segment in the cattle market grew by 1.6%. This is the third year in a row that beef cattle numbers have increased.
Despite high supply and prices that have been lower than average, farmers are pushing forward with increasing herds. They feel good about a significant trend favoring strongly increasing demand for beef. Even so, industry analysts predict prices will go slightly lower for beef throughout 2018.
Why aren’t farmers too worried about downward pressure on price? Randy Blach, CEO of CattleFax, said beef producers “have everything going their way.” For example, beef exports have increased significantly while domestic demand at home has remained solid. American are just eating a lot of beef. Blach made his remarks at the recently held National Angus Convention.
Cattle industry observers agree that it is critical that exports remain strong to keep the bottom from falling out of the beef market. A recent major deal to export beef to China is a huge shot in the arm. China ended a 14-year ban on American beef six months ago. China stopped buying U.S. meat after a breakout of mad cow disease in 2003.
China imports some $2.6 billion in beef from around the world every year. Now U.S. farmers can expect to get a chunk of that lucrative market. The Asian market is critical for beef farmers. Japan and South Korea together account for two-thirds of all American beef exports. Markets are growing in other Asian nations as well – even Russia is buying more American beef today.