Beef market responds to new demands
Talk about good timing! Yesterday when the Gazette's 2003 Beef Edition was being sent to press, the USDA's choice cutout values for boxed beef reached an all-time historic high.
The price -- as of 11 a.m. Wednesday morning -- was $141.19 per hundredweight. That topped the previous high of $139.77, set the day before, and is more than four dollars higher per hundred pounds than the record before the latest spurt.
What's going on? It's a classic case of supply and demand, with the beef industry as "current" as they have ever been. "We're two weeks in front," said Norman Timmerman, who is in charge of the Timmerman & Sons cattle feeding operation in Red Willow County. By this, Timmerman means that feedlots are that far ahead of the projected dates for selling cattle.
The record in choice boxed beef prices came as a surprise, because cattle numbers are standing at high levels. But, the thing that is different now is an upsurge in demand for choice beef.
"We (the cattle industry) didn't see it coming," Timmerman said, "but all the advances in ease of preparation for beef are paying dividends," he said.
Henry Krug, a long-time cattle feeder in Dundy County, agrees. "The demand for beef is good, and the increased demand is the major reason why," Krug said. "We will likely see some seasonal dips this summer, but it's nice to have prices at the levels they are now."
Krug and Eddie Nichols of Wauneta, another long-time cattle producer, also say cattlemen's attitudes are better because of the greener pastures this spring. "It's been tough during the drought, especially for the young people in the beef industry," Nichols said.
Nichols, Timmerman and Krug all emphasized the importance of recent innovations, including beef products which can be microwaved, and new cuts of beef, including the popular flatiron steak at the Whiskey Creek restaurants . The U.S. beef industry is also gaining market share in Mexico and Korea.
Krug said the beef industry was poised to move forward earlier, but was hurt by the 9-11 tragedy and the mad cow scare. But, finally, it's good to see the market improving, with fat cattle hitting a high of $82 in April and holding at the $80 to $81 level at this time.
Having suffered through many highs and lows over the years, cattlemen are leery about predicting the future, but -- at this point in time -- it's nice to know that prices are at a profitable level. That's particularly good news in Nebraska, which has 6.2 million head of cattle and calves and ranks Number One in the nation in commercial cattle slaughter numbers.