Sydney Sleep photo--
Per capita beef consumption in 2018 is currently forecast to be 59.2 pounds per person, 3.3% higher than a year ago.
Sydney Sleep photo-- Per capita beef consumption in 2018 is currently forecast to be 59.2 pounds per person, 3.3% higher than a year ago.


From News Reports

The stars may be aligning for the cattle sector. USDA is reporting bigger production numbers in 2018 and the agency is also predicting larger consumption numbers to eat up those additional pounds.

In the latest World Agricultural Supply and Demand Estimates, USDA lowered its estimate for beef production in 2017 by 149 million pounds, in part reflecting the significant decline in cattle weights from a year ago and likely a less aggressive marketing rate for Q4. Beef production for 2018 was revised up by 325 million pounds, possibly a function of larger placements but also expectations for heavier weights in 2018. 

USDA now projects US beef production in 2018 to be 27.687 billion pounds, 1.22 billion pounds (+4.6%) higher than a year ago. If this forecast is correct, it would be the largest amount of beef ever produced in the US, surpassing the previous record in 2002. The production numbers tell only part of the story, however. What is more important is the availability of beef in the domestic market after we have accounted for population growth. Per capita consumption in 2018 is currently forecast to be 59.2 pounds per person (retail wt. basis), 3.3% higher than a year ago. In October, USDA was projecting 2018 per capita consumption to be up 2.1%. The per capita consumption calculations are vulnerable to significant revisions due to shifts in trade flows as well as changes in production. If this latest forecast is correct, it would be the biggest year/year increase in beef consumption since the mid 1970s. Despite the big jump in per capita availability in the domestic market fed cattle prices are expected to be down only 3.5% from 2017, a reflection of a more bullish demand assumptions.


$300 Million beef deal

Adding to the consumption news is a fresh deal struck between China’s e-commerce giant JD.com and the Montana Stockgrower’s Association. 

Ranchers will supply $200 million worth of Montana-sourced beef to JD.com beginning in January 2018 and continuing through 2020. At a minimum, JD is expected to buy 80,000 to 90,000 cattle, reports the Billings Gazette. 

JD.com will also seek to invest up to another $100 million to build a processing plant in Montana to support Montana beef production, with construction beginning as early as 2018.