Why cattle markets are having a cow

Cattle prices are on the hoof lately. But don't just blame Ben Bernanke. There are plenty of other places to point the finger if you want to assess responsibility for record livestock prices. You can start with wrongheaded U.S. energy policy, tightfisted herders and soaring food demand. Like so many other commodity markets, cattle have been in full trot since the Federal Reserve said in November it would loosen the money supply to keep the economy crawling along. Futures prices for live cattle, the ones being fattened up for slaughter, hit an all-time high last month after rising by nearly a third over the past year (see right), and the action in cash markets has been every bit as wild. "This has been a dramatic rise in the last few months," said Paul Engler, who runs Cactus Feeders, an Amarillo, Texas-based cattle feeder. The Fed's monetary laxity is surely a contributing factor, though it is far from the only one. Prices for all agricultural goods have been screaming higher over the past year, as demand from fast-growing developing countries threatens to overwhelm supplies that aren't growing nearly as fast...more