Cattle, Beef Prices Will Extend Gains in ‘12, CattleFax Says

Cattle, Beef Prices Will Extend Gains in ‘12, CattleFax Says

Record-high cattle and beef prices
may extend their gains this year as declining supplies “are a
certainty,” and as the U.S., the world’s biggest producer of
the meat, increases exports, industry researcher CattleFax said.
The cash price of fed cattle purchased by slaughterhouses
may average $1.22 a pound this year, CattleFax said today in a
report distributed before a presentation at an industry
conference in Nashville, Tennessee. Retail beef may average
$4.80 a pound this year, up 8.1 percent from $4.44 in 2011,
which was up 10 percent from 2010, CattleFax said, citing the
USDA all-fresh retail price.
The U.S. herd, including beef and dairy animals, totaled
90.77 million head at the start of 2012, down 2.1 percent from a
year earlier and the smallest since 1952, government data show.
Beef-cow inventories may drop by 125,000 head this year,
CattleFax said. The herd may rebound with “mild” expansion
late this year and in 2013, according to CattleFax.
Cow slaughter is forecast to drop by 600,000 head this year
with “mild herd liquidation” remaining in some U.S. regions,
CattleFax said.
“Shrinking cattle supplies and higher input prices will
continue to influence industry structure in 2012,” CattleFax,
which has studied livestock markets for four decades, said in
the report. “It is possible that feedlot and packing capacity
will be reduced as margins shrink.”