Higher Beef Prices in 2012
Due to severe drought in the southern U.S. Plains, cattle ranchers in Texas, Oklahoma and other states are liquidating herds at historically high rates, which is expected to increase beef supplies in the near term and help keep a lid on higher beef prices. But Barron’s points to tighter supplies of slaughter-ready cattle next year, which will likely lead to higher beef prices in 2012.
“As we go into 2012 and 2013, we’re seeing tighter and tighter supplies of valuable cattle to produce beef in this country,” John Nalivka, an economist at Sterling Marketing, an agricultural-advisory firm in Vale, Ore., told Barron’s. “The fact is, we’ve continued to reduce the inventory and we haven’t been building herds.”