Cattle prices hold up in USA

By Joanna Newman

US CATTLE prices have held on firmly to their gains, following the sharp jump in early February caused by Russian food-aid rumours.

The Chicago live cattle April futures contract closed on Tuesday (16 February) at 67.57¢/lb (90.8p/kg), little changed from a week ago but up from around 65¢ at the start of the month. The contract is at its highest level since last July.

The recent rally was triggered by news of extensive beef shipments by the US government to Russia over the next few months, possibly as much as 300 container-loads a week.

This week the US Department of Agriculture hinted that it may further increase food assistance, if Russia demonstrates that it can distribute the meat satisfactorily. The package currently comprises $953 million-worth of food, including $260m-worth (£159m) of beef.

In line with the rise in futures values, US slaughterers have also shown a willingness to pay more for market-ready cattle. Better beef values in recent days have improved their margins and enabled cattle producers to hold out for higher prices.

Packers are bidding 62¢/lb for live animals and paying up to 64¢, compared with bids of around 61¢/lb last week.