Back on Monday we got the monthly crop production report out from USDA and they also release S&D’s for the meats every month, along with that grain data. The production projections for beef continue to look really bullish. Back in 2022, beef production set an all-time record of over 28 bln lbs, it dropped off hard in 2023 to just over 27 bln, this year’s projection is 26.8 bln lbs and in 2025 the latest prognostication is for 25.5 bln lbs. Sharply declining production is great for bullish banter by analysts, but there’s a lot bigger picture to digest then just the production total. Beef exports have dropped considerably from a year ago with next year looking even worse. Imports have increased significantly also and will set an all-time record for imported beef this year and likely an even bigger record next year. While that doesn’t stop total available supply of beef from dropping still for domestic consumer and foreign export markets, it certainly tames the decline. That’s certainly not something permabull analysts like to talk about very much because it kinda ruins the narrative.
The other side of the “taming of the bull” discussion focuses on the competing meats of pork and poultry and this is a BIG one! The classification in the S&D’s that encompasses pork, poultry and beef is known as total red meat and poultry production. When you take into account production in those three markets, plus everything we import, minus what’s exported (so this means total available product to US consumers)…, aside from 2023 where it dropped down mildly from 2022, we’ve set new all-time records in that category every year since 2015. There was 84.9 bln lbs of beef, pork and poultry available for domestic consumption back in 2015, there’s 95.67 bln lbs available this year and 95.72 bln projected for 2025. Both set new records again.
All that being said, cattle futures in both fats and feeders traded at their highest levels ever last year and again this year, easily trading above 2014 high water marks. The reason I quoted all that data is that it’s stuff you won’t hear from the vast majority of trade organizations or analysts because it tames down that bullish narrative significantly. There’s a huge difference between the crowd that tells you what you wanna hear, versus the one’s that tell you what you need to know. I’m telling you what you need to know.
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