The US beef industry is undergoing a significant two-year decline in production, leading to higher retail prices for consumers and posing challenges for beef processors. Reduced cattle supplies from ongoing beef cow herd liquidation are expected to drive up live cattle prices for cattle feeders, making it harder for beef packers to turn a profit in 2024. This year is anticipated to be more challenging for packers than 2023, as US cow-calf producers continue to reduce herds. Tyson Foods reported a substantial operating loss in its Beef segment for Q4 2023, marking its first annual loss since 2015.
JBS Beef North America reported a healthy profit in Q3 2023, but its US beef division faces challenges due to a shortage of cattle for slaughtering. Pork and poultry production are projected to increase in 2024, according to USDA forecasts. US beef production is expected to decline to 25.810 billion lbs in 2024, down 4.2% from 2023. This reduction contributes to an overall decrease in red meat and poultry production, with consumption per person also expected to decrease slightly.
The decline in beef production is attributed to a drop in cattle numbers, with the Jan. 1, 2023, total down by 3%. Analysts expect another reduction in total inventories, with the rebuilding of the beef cow herd unlikely until 2025 at the earliest. The industry faces excess capacity despite previous challenges, with the largest 71 beef processing plants having a capacity to process 134,705 head per day. This capacity surplus raises questions about the industry’s adaptability amid ongoing shifts in cattle numbers and market dynamics.