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Cattle Prices are Going Down

  • Marlon Mata
  • June 1, 2011

A larger supply of beef in the United States is starting to push down its price in the market. And the numbers are great than that of last year.

In the next few weeks, there are indications that wholesale prices of beef in the market will get lower. According to government analysts, there are more cattle being fattened in farms and more beef in storage compared to last year. This could be attributed to the recent droughts in Oklahoma, Texas, and Mexico that has forced ranchers to place their cattle in feed lots.

The foremost group that will benefit from the increase would be the meat packing sector. Companies like Cargill, Tyson Foods, and JBS would be able to sell more meat to the market, thanks to the higher volume of beef available. With the plants producing more meat products, consumer can expect a higher number of meats being sold in groceries and supermarkets.

“We have more beef and pork in storage than a year ago and we have more beef coming at us,” said Don Roose from the U.S. Commodities Inc. “We just confirmed that we will have big numbers ahead and that is good for the packing plants.”

Analysts are saying that the increase in beef supply would be hovering around five percent.

Cattle prices had been in decline since April, when it reached a record high $120 per 100 pounds. After that, prices have been steadily dropping. For this week, cattle were traded at $108, and it can get $2 lower the next week. It is expected that the price will drop lower, even below the $100 mark.

Cattle Prices are Going DownOf course, beef consumer may not experience lower prices soon enough. Since supermarkets and groceries are slow in passing on to consumers the higher prices of meat in the past, it may take some time before any visible decrease in beef prices could be seen.

“I don’t think it will provide any significant relief in prices but it should prevent any further increase in retail beef prices,” according to Doug Houghton, an analyst with Brock Associates.

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