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Hold on to your briskets...
from link below:
Cattle futures hit all-time high
The prices of U.S. cattle futures have hit an all-time high as the industry braces for declining beef supplies and the export market continues to soar. Live-cattle futures on the Chicago Mercantile Exchange are now at $1.1752 a pound, continuing a surge that began last summer.
The retail U.S. price of choice beef was at $4.54 per pound in January, and it’s expected to continue to jump, according to Ron Plain, professor of agricultural economics at the University of Missouri.
Export demand for U.S. beef climbed 24% in 2010 and is remaining strong. Beef exports were up 25% in January compared to a year ago; beef imports were down 20%.
But Plain says that the news will be tempered by another factor: “It sounds fantastic, but feed costs are also going to be a record high this year, so it’s not quite as wonderful when you look at the bottom line,” he said.
Another factor is a drop in cattle weights, which indicates tightening supplies. According to the CME Group, the average cattle weight dropped from 625 to 610 pounds between Feb. 12 and Feb. 26.
“We’ve reached a low point, but we’ll get tighter yet,” Derrell Peel, extension livestock marketing specialist at Oklahoma State University, said of livestock numbers. “This is probably the year we begin to aggressively retain heifers for herd expansion – and the data don’t suggest we’ve done that yet. Given that we are at such low levels, our ability to expand will be limited for a couple of years because we just don’t have the number of cattle to work with.”
The U.S. Department of Agriculture reports that the nation’s cattle herd is the smallest since 1958.
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