Record-high U.S. cattle, beef prices seen in 2013-CATTLEFAX

Fri Feb 8, 2013 4:15pm EST

By Theopolis Waters
    TAMPA, Fla. Feb 8 (Reuters) - U.S. cattle and beef prices
should set more record highs this year as the worst drought in
half a century, which wilted pastures and drove up feed costs,
forced producers to trim the nation's herd to the smallest since
1952, according to industry marketing and analytics firm
CattleFax.
    Prices for slaughter-ready cattle, or fed cattle, could
average $126 per cwt, up $3 from last year, which would be a
fourth consecutive yearly increase, Cattlefax CEO Randy Blach
said during a Friday session at the National Cattlemen's Beef
Association annual meeting.
    "We'll see record high fed cattle prices at some point here
in the spring where we'll see the market top the $130 level of
last year," said Blach.
    That forecast is based on more declines in cattle herd due
to the drought in the southwestern United States, a seasonal
decline in slaughter-ready cattle during the spring and stronger
beef exports.
    Separately, the U.S. Agriculture Department released its
monthly production report on Friday, in which it forecast 2013
slaughter steer prices of $124 to $132 in the spring quarter,
$125 to $135 in the third quarter, and $127 to $137 in the
fourth quarter
    
    HIGHER MEAT PRICES FORECAST 
    Grocery shoppers can expect record high beef prices in 2013,
with the retail price seen on average at $4.85 per lb, up 4 pct
from 2012, said Blach. 
    Retail prices hit a record high of $5.15 per lb in November
before easing to $5.11 last month, according to USDA.
    In addition to record beef prices, Blach said pork and
poultry prices have also increased in the last few months.
    "All of those protein prices are going to get higher," he
said. 
    Escalation in meat prices may be slowed as consumers remain
cautious buyers in the slowly recovering domestic economy.
    "The demand side of the puzzle doesn't appear to be any
better than steady. We're just not going to have as much
disposable income," he said.
    If beef prices are to come down, feed and hay costs will
have to decline to encourage producers to expand the U.S. cattle
herd. 
    "We've got to see expansion of the herd. If we were to start
expanding tomorrow, we're 30 months down the road before we can
really impact production. So, prices are going to stay elevated
for quite some time until we can respond to Mother Nature's
signal to re-grow the herd," said Blach.
    In its Friday report, USDA forecast 2013 U.S. beef
production at 25.19 billion lbs, down 3 percent from 2012.

 (Editing by Bob Burgdorfer)
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