“ The response to COVID-19 has induced market disruptions and a sharp , but indeterminate , economic contraction that has affected the agricultural sector in disparate ways depending on the commodity ,” said FAPRI analysts . “ However , large carryout stocks and sizable 2020-21 production for many commodities , uncertainty regarding fulfillment of the Phase 1 trade agreement with China and the timing of the rebound of the size of the Chinese hog herd have also significantly contributed to market conditions .”
FAPRI projected the five-area direct average fed steer price for 2021 at $ 113.15 / cwt ., compared to an estimated $ 109.84 in 2020 . After 2021 , projected prices increase steadily from $ 119.94 in 2022 to $ 130.91 in 2025 .
For feeder steers ( 600-650 lbs ., Oklahoma City ), FAPRI forecast the 2021 price at $ 150.54 , compared to an estimated $ 144.46 for 2020 . After 2021 , projected prices increase steadily from $ 164.43 in 2022 to $ 179.03 in 2025 .
In the meantime , the closely watched Rural Mainstreet Index continues to underscore challenges in the domestic agricultural economy .
“ Recent improvements in agriculture commodity prices , federal farm support payments , and the Federal Reserve ’ s record low interest rates have underpinned the Rural Mainstreet Economy . Still , only 6.5 % of bankers reported economic improvements from October , while 12.9 % detailed economic pullbacks for the month ( November ),” explained Ernie Goss , PhD , Jack A . MacAllister Chair in Regional Economics at Creighton University ’ s Heider College of Business .
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Beef Demand Hangs Tough
Perhaps , due in part to federal economic stimulus early in the pandemic , domestic retail beef demand continues to be resilient as consumers continue to eat more meals at home . Beef demand from domestic food service remains challenged , however .
“ Loss of outdoor dining in cold weather will further aggravate restaurant challenges . Food service demand is likely to be additionally affected with worsening public health challenges . Macroeconomic concerns will grow as consumers go forward with less unemployment support ,” explained Derrell Peel , Extension livestock marketing specialist at Oklahoma State University , in his November market comments .
Customer transactions at major U . S . restaurant chains stabilized in October but continued lower year over year , according to The NPD Group ( NPD ).
Specifically , overall transactions held steady each week in October at 9 % less year over year , according to NPD ’ s CREST ® Performance Alerts ( CPA ). Quick service restaurant chains , able to leverage offpremises operations during the pandemic , also stabilized at -9 % throughout the month . CPA data tracks chain-specific transactions and share trends for 75 quick service , fast casual , midscale , and casual dining chains representing 53 % of the commercial restaurant traffic in U . S .
“ While some of the steep transaction and traffic declines experienced at the height of the mandated shelter-at-home and dine-in closures
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