Thursday, January 3, 2013

Analyst: Brace yourself for record high beef prices

John T. Barone
Before winter set it, we were regularly exposed to news reports about the wide-reaching effects of the multi-state drought and what they meant for our agricutural sector.

Some of us may have forgetten about those dire predictions as we cruised through the election, the holidays, and so on. Now, they're back.

In his weekly "Commodities Watch" column for Nation's Restaurant News, John T. Barone, president and commodities analyst for Market Vision Inc., sets us straight:

"The December USDA cattle report showed feedlot inventories at 11.33 million head, down 6% from a year ago. November feedlot placements at 1.92 million head were better than expected but still 5.6% below last year," he writes.

Meaning what, in layman's terms?

"Fewer cattle foreshadow record-high beef and cattle prices for 2013. In 2012, producers were able to offset lower cattle numbers with higher carcass weights that averaged 3.1% % above 2011. As a result, beef output in 2012 managed to post a 1.3% increase. By contrast, 2013 beef output is expected to fall by 5%."

The outlook goes beyond expectations. Cattle futures have jumped from $125.88 to $129.40 over just the past three weeks. Forward contracts for 2013 are averaging $134, which is 9.4%  above 2012.

The price increases and smaller supplies -- all of which will be felt along the consumer pipeline right down to the restaurant or home dinner tables -- are not limited to beef.

Hog inventories have decreased .04% and the breeding her .2%. Market analysts also have said chicken prices may rise, with particular emphasis on such products as chicken wings.

Go here for the region’s best local food & drinks events calendar.


No comments:

Post a Comment