Thriving in Uncertainty: Beef Demand and Cattle Prices

December 15, 2024

The 140th Montana Stockgrowers Association (MSGA) Annual Convention brought cattle producers, industry leaders, and experts together to discuss the challenges and opportunities facing the beef industry in 2024. Among the event's keynote speakers was Dr. Nevil Speer, a renowned industry consultant, who shared his insights on the state of beef demand, tightening cattle supplies, and the critical role of global trade.

Despite ongoing economic concerns, Dr. Speer emphasized that beef demand remains robust. He credited the industry's focus on quality, marketing, and research for driving consumer loyalty, even in a year dominated by inflation worries.

"Consumers are the business," said Dr. Speer. "Every dollar in this industry starts with consumer spending. Even with economic challenges, beef has continued to perform exceptionally well at both retail and wholesale levels."

Watch the Video Podcast with Nevil Speer here:

Speer noted that while producers often question when consumers might reduce beef purchases, strong demand has defied predictions for over a decade.

Dr. Speer highlighted that cattle supplies remain tight due to persistent drought and ongoing reductions in the cow herd. Despite these challenges, the industry has maintained fed beef production levels nearly on par with previous years, thanks to improved efficiency and innovation.

"With fewer cows, we're producing more with less," he said. "The market is strong, and producers are forecasting record profits for 2024. But now is not the time to be complacent. Risk management is key to protecting equity in these favorable conditions."

Global trade was another focal point of Dr. Speer's presentation. He discussed the importance of exports to the beef industry, noting that trade adds approximately $400 per head in value. However, he also warned of the risks associated with tariffs and potential retaliatory measures from key trading partners like Canada and Mexico.

"Trade is a vital component of the beef industry's profitability," said Speer. "We benefit from both imports and exports in ways that few other industries do, but we need to tread carefully to maintain favorable trade relationships."

Looking ahead to 2025, Dr. Speer urged producers to stay vigilant. He encouraged the use of risk management tools such as Livestock Risk Protection (LRP) and futures to safeguard profits amid uncertainty in weather, trade, and markets.

"We're in a strong position now, but challenges like drought and fluctuating trade policies can quickly change the landscape," he said. "The key is to be proactive and prepared."

Source: Western Ag Network and LaneCast Ag Podcast