Low Supply Expected to Keep Beef Prices High

Beef prices will remain high for the next few years, as ranchers and feedlots have reduced their supplies partly in response to rising prices of corn and soybeans according to the Associated Press.

The average retail price for beef per pound in July 2009 was $4.18, while the price for July 2010 rose to $4.44.  "The poultry and pork industries are poised to fill the gap, which ultimately could cause beef prices to drop.  Consumption of poultry -- chicken and turkey -- is forecast to climb by 8.4 percent to 107.9 pounds per person, by 2019, according to the USDA."  

David Anderson, a livestock economist from Texas A&M University said that cattle producers have had a difficult past several years "and the response to that economically is to produce less because you're losing money."

Beef exports are also higher this year, up 16 percent according to the U.S. Meat Export Federation.

Anderson said that it could be 2012 before producers begin to increase the size of their herds.

To read the Associated Press story, click here.

Posted: 10/27/2010