David Boussios, head economist at DecisionNext, a company designed to apply the latest statistical and AI tools to enable companies in the food and ag space to optimize the buying and selling of commodities, shares insights on the current outlook for beef and other proteins going into 2025.

What will the impact of the ongoing tight beef supply be for retailers and foodservice operators in 2025?

David Boussios — There will surely be a continued downward shift at the price point, which will likely further highlight the importance of operators securing supplies from imports, particularly in the trim and ground beef markets. At the same time, we are now finally starting to see more signs of heifer retention prior to the feedlot level, which everyone thought would come earlier. In the seven weeks since the start of October, the percent of feedlot sales to heifers was 39.5%, which is a bit lower than the 41.9% observed in 2023 for the same period. There is a lot of noise in that data, but it does appear to show some movement on the timing of the herd rebuilding story. This should provide some hope to those suffering through high beef and cattle prices.

With pork exports positioned to set volume and value records in 2024, how does that intersect with the incoming administration’s plans to levy tariffs on key US pork export markets such as China?

David Boussios — In the hog and pork market, it is important to recognize how pricing has changed since the last trade war with China. Since about 2019, the US formula hog market has significantly shifted away from using negotiated hog prices to using the pork cutout value for pricing hogs. Essentially, hog prices have shifted from being priced by hog producers’ conditions to being heavily determined by pork demand. Strong pork demand and low feed prices during the latter half of 2024 improved the financial conditions of hog producers, which were pretty bad in 2023. A reduction in pork export markets would significantly impact hog producers because now they share in the export demand risk. Alternatively, if any trade spat was concentrated in the feed market, such as soybean and soybean meal prices, that would benefit producers because those conditions track into hog prices much less than they did in the past.

How is the lingering effect of retail price inflation influencing consumer purchasing decisions for beef and pork products?

David Boussios — Retail inflation is inherently a result of strong consumer demand. However, what we are hearing from consumers is that it might be softening, as the price increases across all items may not be as tolerable as they were over the prior few years. Consumers are seeing large increases across all items, and that is surely impacting their sentiment, if not their spending. I typically like to track the University of Michigan’s personal finance questions, which asks consumers if they are better or worse off financially than a year ago. For the bottom- and middle- third of the income spectrum, the reading is the lowest since 2011. At the same time, we also know that food tends to be one of the last things to cut, particularly around the holidays.

What emerging regulatory developments will impact protein markets in 2025?

David Boussios — This is not strictly a regulatory development, but one important issue that could have a significant impact on the food industry is the availability of labor. We know inflation over the past few years was driven by expansionary fiscal and monetary policy and tight labor markets. Shocks to labor markets can have significant impacts on the supply chain. With reports suggesting anywhere between 30% to 50% of labor coming from migrants in fruit and vegetable production or meat processing, it is important to evaluate how cutting the migrant labor pool by even a little could have big impacts across the food sector.  

What are some market growth opportunities for beef and pork products in the coming year?

David Boussios — I am probably not the best person to speculate on this topic, but personally, I think it will come from finding new ways to transform some cuts that are not getting the credit they deserve. Lately, I have been really enjoying finding new ways to cook boneless beef short ribs and add them to a variety of dishes.