Beef Prices Seen Rising to Record as U.S. Cattle Herd Shrinks

The U.S. cattle herd as of July 1 probably shrunk to the smallest on record, signaling tightening beef supplies and higher costs for shoppers and companies from Tyson Foods Inc. to Wendy's Co. Ranchers held 99.39 million head of cattle as of July 1, down 1.4 percent from a year earlier, according to the average estimate of nine analysts surveyed by Bloomberg News. That would be the smallest July herd since at least 1973, when the U.S. Department of Agriculture data begins. The government plans to release its semiannual report on the herd at 3 p.m. today in Washington. "If you've got fewer cattle, ultimately you're going to have less beef," Ron Plain, a livestock economist at the University of Missouri in Columbia, said yesterday in a telephone interview. "We're going to have new record cattle and beef prices in 2012." Cattle futures, which climbed to a record $1.21625 a pound on April 4, may climb to $1.23 as early as October and $1.25 as soon as March, said Plain, who has studied the industry for three decades. The size of the current herd is probably the lowest since the 1950s, he said...more