Tight cattle supply will keep prices high in next few years; US exports booming

Americans love their beef, but with prices expected to remain high for the next few years and other options plentiful, their loyalities might be challenged. Average retail prices of beef have climbed from $4.18 per pound in July 2009 to $4.44 per pound last July, a change largely due to a tight supply of cattle. Ranchers and feedlots have reduced supplies in response in large part due to rising prices of corn and soybeans fed to cattle, economists said. "You've got a whole bunch of things coming together and it's driving all meat prices higher," said Ken Mathews, an agricultural economist with the research arm of the U.S. Department of Agriculture. "Beef is the highest price of the meats so that's the one that gets the notice." Cattle producers "took it on the chin" the past several years, Texas A&M University livestock economist David Anderson said, "and the response to that economically is to produce less because you're losing money." The poultry and pork industries are poised to fill the gap, which ultimately could cause beef prices to drop. Consumption of poultry — chicken and turkey — is forecast to climb by 8.4 percent to 107.9 pounds per person, by 2019, according to the USDA. "It puts beef in a difficult demand situation longer term," Anderson said. The USDA projected per capita consumption of beef would drop through 2014 — to 56.2 pounds — as beef production continues to lag...more