With inflation and rising prices, some threats to the beef industry are looming in 2023. These could impact profit margins and worldwide beef supply to consumers. We’ve gathered researched data from a variety of sources to give you a look into expectations in the new year for ranchers and beef consumers alike. For more industry news, visit our blog.
Inflation
Inflation affects us all across many areas of our lives, but let’s go beyond the anecdotal evidence and take a look at the numbers. The U.S. Department of Labor’s Bureau of Labor Statistics released the consumer price index (CPI) for 2022. They compile prices throughout the year, averaging them and comparing them to data from 2021 to show specific inflation rates. The beef and veal category was the only one that had a lower inflation rate in 2022 than in 2021. Other categories featured in the CPI include eggs, poultry, and dairy-related items. Perhaps we’ll see an even lower inflation rate on beef this year.
Weather
The probability of a third consecutive La Nina weather pattern is declining for this year. La Nina weather patterns can cause drought in some areas and extreme flooding in others, making beef production difficult.
Demand
This is where things get complicated. If economic difficulties continue, we can see strain on domestic and beef exports. However, after a lowered expected beef production for the last quarter of 2022, the USDA expects to see higher beef slaughter in 2023 based on firm demand. If supply and demand holds steady, there’s room for financial growth across the industry. However if beef production holds steady while demand decreases due to inflation or unemployment, packers may slow slaughter to accommodate their profit margins.
No matter what the future holds, Dark Hammock Legacy Ranch is committed to providing our consumers and community the quality beef they know and love at fair prices for their family. For more about what we do, learn about our history.
