By Joanna Levin
US CATTLE prices have continued to move higher this week on perceptions of tighter short-term supply and strength in the wholesale and retail beef markets.
The light Choice-grade beef cut-out increased from 95.88 cents/lb towards the end of last week to about 98 cents/lb early this week. US packers have raised their bids for slaughter cattle to 61 cents/lb, up from 57 cents/lb a week ago. The Chicago December live futures contract closed on Tuesday 13 October at 65.72 cents/lb, up from 64 cents last week and 62 cents at the start of the month.
The latest US Department of Agriculture report on beef supply and demand held few surprises. Although cattle slaughtered this summer were heavier than forecast, the total amount of cattle slaughtered was less than expected. The estimate of the third quarter beef production now stands at 6.7bn lbs, compared with 6.5bn lbs in quarter two. Looking ahead to later this year and early next year, slaughter weights are expected to reach record highs.
The news on the demand side looks worrying. Even in the land of the hamburger, health trends and fashion are causing Americans to eat less beef. Per capita beef consumption is expected to drop from 67.9 lbs/year this year to 63.3 lbs next year.