| CHICAGO, March 1
CHICAGO, March 1 U.S. cash cattle prices jumped
this week, posting their biggest increases in a year after
blizzard conditions in the southern U.S. Plains reduced the
amount of market-ready animals and slowed deliveries to packing
plants, traders and analysts said on Friday.
Live steer and heifer prices increased $5 per cwt in the top
cattle producing state of Texas, the largest increase since
February 2012. That is expected to push wholesale beef prices
higher and could further reduce already lackluster consumer
demand for red meat.
Beef packers, caught short amid the snowfall, aggressively
hiked their bids to buy cattle. Prices in the Texas Panhandle
surged to $128 per cwt and Kansas cattle gained $3 to $127, with
cash prices overall the highest in about two months.
Retail beef prices are the highest ever, rising to $5.24 per
lb for benchmark choice cuts in January, according to the U.S.
The highest gasoline prices since the end of last summer and
the steepest drop in consumer income in 20 years have also
pressured demand at butchers and grocery stores even as
uncertainty surrounding budget and job cuts due to the so-called
sequester keeps a lid on beef buying.
"The overall economy is looking uneasy and that's not good
for meat demand," said Ron Plain, an extension agriculture
economist at the University of Missouri.
Still, beef prices are underpinned by the smallest U.S.
cattle supply in 61 years after the worst drought in five
decades led to record-high animal feed prices, leading some
cattle producers to liquidate their herds.
The blizzard that dumped 20 inches of wet snow this week in
the Plains cattle country mitigated drought conditions but
stressed animals in pastures and feedlot fattening operations,
slowing weight gain. Feedlot operators also struggled to load
animals in trucks and transport them to slaughter houses.
"It was hard for the feedlots to get the animals to the
packing houses. You're dealing with 2 feet of snow out there in
the country. That's hard conditions to get semi's out on country
roads," an Iowa cattle broker said.
Meat companies, such as Tyson Foods Inc and Cargill
Inc, are likely to pass the higher cattle prices onto
consumers. Beef packers, on average, are losing $23.40 per head
of cattle they slaughter, according to the advisory service
Plain, the economist, expects another record retail price
for beef. "I don't think the record (in January) is going to
last for the year," he said.