Plenty of research out there suggests that eating red meat might not be that good for you, but that hasn’t stopped grill masters from serving up steaks and burgers to welcome the warming weather.
And they’ll have plenty of room to celebrate if recent price outlooks for beef stay on point. Bloomberg reports that a boom in production will drop the price of beef products in the near future, enough to rival pork and chicken during the coming summer months.
All of that cheap meat is sure to catch consumers’ eyes, as experts predict that Americans will eat 8% more red meat and poultry this year than they did three years ago. Retailers and restaurants will also be getting in on the low prices by stocking up on beef supplies, and exporters will be looking to push beef to other countries.
“If you lower prices enough, you can get products sold not just in the near term, but for the next three to five months… For two or three years we were in a situation where beef went up and up, and it became difficult to run full promotions. Suddenly, the market switched and allowed more operators to do that,” explains consultant Altin Kalo.
Trading with China
One of the countries that will likely be targeted most is China. It is currently the second-biggest buyer of beef in the world, and recent developments suggest that the U.S. is close to restarting trade with the country.
Beef markets had been closed between the two countries since 2003 before being opened again in September. The Trump administration called the restarting of trade between the two countries a “big prize.”
All of these factors have made speculators bullish when it comes to buying beef, but the turn in fortunes may only last for a short time. Bloomberg points out that supplies of beef are actually tighter than they appear, since many cattle aren’t yet ready for market. However, the huge demand and current supply will likely get us through the year until prices begin to normalize.
“I don’t think there’s so much bullishness going into the end of the year. There’s going to be some herd expansion, and there’s the realization that there’s going to be larger pork and poultry supplies. That’s why the bullishness is only near term,” said chief market strategist Donald Selkin.