Friday, January 28, 2011

U.S. Cattle Herd at Lowest Since 1958 May Send Beef Prices to Record High

The U.S. cattle herd probably shrunk to the smallest size since 1958, and the drop in beef supplies may boost prices to a record, analysts said. Ranchers held 92.211 million head of cattle as of Jan. 1, down 1.6 percent from a year ago, according to the average estimate of seven analysts surveyed by Bloomberg News. That would be the smallest herd in 53 years, said Ron Plain, a livestock economist at the University of Missouri in Columbia. The government releases its semiannual report on the cattle herd at 3 p.m. today in Washington. “Cattle producers are being squeezed by tough finances and a soft economy,” Plain said. “The supply is just shrinking. Beef prices are likely to be record high in 2011, and it should be a record that will last.” Wholesale choice beef has jumped 23 percent in the past year to $1.731 a pound, and costlier meat may spur restaurants and grocery stores to pass along costs to consumers. The highest price was $2.0118 on Oct. 16, 2003, according to Bloomberg data from the government dating back to 2001. Shoppers may pay as much as 3.5 percent more for beef this year, the government has forecast...more

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