The retail U.S. price of choice beef was at $4.54 per pound in January, and it’s expected to continue to jump.
Export demand for U.S. beef climbed 24% in 2010 and is remaining strong. Beef exports were up 25% in January compared to a year ago; beef imports were sown 20%. Keep in mind that feed costs are also going to be a record high this year, so it’s not quite as wonderful when you look at the bottom line.
Another factor is a drop in cattle weights, which indicates tightening supplies. The average cattle weight dropped from 625 to 610 pounds between February 12 and February 26.
Beef has reached a low point, but we’ll get tighter yet. This is probably the year we begin to aggressively retain heifers for herd expansion. Given that we are at such low levels, our ability to expand will be limited for a couple of years because we just don’t have the number of cattle.
The U.S. Department of Agriculture reports that the nation’s cattle heard is the smallest since 1958.
Source: Meatingplace Online; By Michael Fielding, 3/11/11