This past year won’t be remembered for record-high prices, but 2015 certainly taught beef producers a few lessons.
Lesson #1: More Competition, Lower Prices
Beef has seen the competition for freezer and menu space ramp up drastically this past year.
The pork industry has finally bounced back from PEDv and put more pigs through finisher farms. Broiler chicken raisers had a difficult time with breeding last year when one line of roosters had low fertility. “The reduced production from those competing meat proteins in 2014 supported beef,” says Andrew Griffith, economist with University of Tennessee.
Feeder cattle prices went on a nice run in 2014 that couldn’t be sustained into 2015. “The market starts realizing we’ve got poultry and pork production back up to speed, but now we’re having difficulty exporting those meats,” Griffith says.
Poultry farmers had their own deadly outbreak of avian influenza to deal with in 2015, but it actually hurt trade leaving more chicken on the domestic market.
Russia’s stoppage on exports from the European Union because of the conflict in Ukraine has hurt global pork trade. “In 2014, Russia decided to stop importing pork from the EU, which was there primary pork source. That has hurt EU pork prices and they have to go somewhere with that pork,” Griffith says.
Lesson #2: Strong Dollar Impacts Trade
The improved U.S. economy has helped boost the value of the dollar compared other currencies around the world. For instance, the dollar ranks behind the euro, but the dollar has increased approximately 10% in value comparatively from December 2014 to December 2015.