This week’s article is a little different from usual, but hopefully one that you’ll enjoy. I was in Washington D.C. over the weekend at the Agricultural and Applied Economics annual meeting. This is our national association and it brings together applied economists from around the world studying nearly every topic you can imagine. Naturally, I spent my time in the livestock and marketing sessions and I wanted to share a few short summaries of issues currently being studied by other economists.
Retail Price Dynamics for Beef. One presentation by USDA Economic Research Service discussed how they are updating their forecast methods for beef prices. Specifically, they are looking at wholesale to retail price spreads. This is a topic I find interesting because I’ve been paying attention to the changing farm to retail price spread. As shown in the figure below, the value of a choice steer as a percent of the retail beef value has declined over the past few years. Another way to say that is that live animal prices have declined more relative to beef prices. This is an indicator of strong beef demand in the face of larger supplies, but one drawback to the data is the retail price doesn’t include special pricing such as holiday sales or weekly specials which would lower the retail beef price.
Major Disease Issues in Livestock Production. Dr. Dustin Pendell at Kansas State University discussed some of the major diseases that affect livestock production. For cattle specifically, Bovine Respiratory Disease (BRD) was a big topic. He pointed to a prior study from 2011 that suggested 22% of feedlot cattle were affected by BRD. Another interesting point he discussed was the movement of the National Bio and Agro-Defense Facility currently under construction in Manhatten, KS. Beginning in 2022, this will be a state-of-the-art biocontainment laboratory for the study of diseases that threaten both America’s animal agricultural industry and public health. More information is available HERE .
Antibiotic Use Restrictions. Related to the animal disease issues, economists at USDA ERS presented on research surrounding the recent antibiotic use restrictions. Specifically, the Veterinary Feed Directive (VFD) and the ability to use antibiotics for treatment but not for prevention. The research team is looking at the economic impact of recent rules that limit antibiotic use. What is happening pre and post implementation? The research is ongoing. It is possible that vet costs are rising due to the increased oversight. The team is also interested in the profile of the consumers who demand antibiotic-free.