Beef Prices

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Consumers may see lower beef prices with cattle market glut Associated Press Oct. 22, 2001 07:41:00

WICHITA, Kan. - Consumers should find lower prices at their meat counters the rest of this year in the wake of a slowing economy that has created a glut in the nation's cattle markets, analysts said.

The same public uncertainty that has reduced air travel and tourism is also driving down demand for beef at hotels, restaurants and resorts. That's having a big impact on cattle prices, considering that half of the beef raised in this country is eaten outside the home, said James Mintert, Kansas State University extension economist.

Aggravating beef's downward spiral was the discovery last month of mad cow disease in Japan, the single biggest buyer of U.S. beef. Early trade reports suggest Japanese consumers are not buying either their own domestic beef or U.S. exports, Mintert said.

"It is a very nervous market - people are very concerned where consumer demand for beef will be, even in the short run," Mintert said.

Industry groups are urging consumers to take advantage of the low prices - and eat more beef.

National Cattlemen's Beef Association, the trade and marketing organization for U.S. beef producers, has been urging consumers to keep watch for favorable beef prices as the market adjusts to current economic conditions.

The association has asked the government to buy more beef for its food service programs, while asking retailers to note the lower prices and pass on the savings.

"With ample beef supplies for the rest of 2001, we are encouraging supermarkets and restaurants to take advantage of lower prices now and pass those savings on to consumers," said Chuck Lambert, the NCBA's chief economist.

The cattle market's sensitivity to current events was shown by the current anthrax scare.

The live cattle futures market for October closed at $68.55 per hundredweight Oct. 11. Four days later, it was down to $65.75 per hundredweight - taking another sharp drop after President Bush announced that a letter sent to Senate Majority Leader Tom Daschle tested positive for anthrax.

Cattle prices have weakened since early September, Mintert said. Both cash and futures prices were down before the terrorist attacks, but the declines accelerated in later weeks.

Because of the lag time between cattle markets and slaughter, consumers usually don't see lower prices until months later.

Feedlots are responding to the low market prices by putting fewer cattle on feed, in an effort to reduce supplies and return prices to profitable levels.

Livestock now being put on feed at the nation's feedyards would typically be marketed in midwinter, late winter and even spring. Then, beef supplies would begin to tighten again, and prices could be expected to rise.

Prices now are so low that cattle producers are not making the break-even price in the mid-$70s per hundredweight, Mintert said. Recent cash prices have meant a loss of $60 to $80 a head for each animal sold, he said.

Nearly one in four steaks or hamburgers eaten by the American public comes from cattle fed in Kansas, and more than 22 percent of all cattle fed in the U.S. comes from Kansas. The state ranks first nationwide for commercial cattle processed each year - 8.21 million head, according to government statistics.

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Anonymous

I wish cattlemen would quit selling.I realize a lot of times you don't have a choice when they're ready they have to go.I am not in a hurry to sell now even though I have stockers ready.Also the government should cut back on Canadian and Mexican imports until we get our prices back where they should be.

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Anonymous

The government doesn't import cattle. It is companies that are engaged in regular business that do.

Fat cattle need to be moved on a regular basis as age will only make them bigger causing a further glut of beef. Holding them back on gains only makes the feedlot lose money on extended time on feed and increased cost per pound of gain.

The current problem is people not going out and eating beef. Sept 11 caused many to sit home and watch the news instead of go out and order a good meal. The worsening economy isn't helping either. If a person loses his job he quits eating out, cuts back on more expensive groceries (meat) and basically quits spending on anything not necessary to his survival.

The prices actually have help up rather well all things considered. If packers quit killing a full week of cattle, they will lay off workers and cause a further weakening of the economy.

We will just have to work through this tough time, doing whatever we need to do to survive if and when things return to a more 'normal' state.

Jason Trowbridge Southern Angus Farms Alberta Canada

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Anonymous

" The government doesn't import cattle. " Correct, but the government uses quotas on the numbers of live feeders coming in, and tariffs to adjust the price.

"The current problem is people not going out and eating beef."

We don't raise enough cattle here in the Us to feed ourselves. To say imports are not the most important thing in cattle prices is delusional.

Now with the county of origin labels and the competition bill shot down and free trade of the americas being pushed like dope downtown detroit... expect cattle numbers and cattle prices to fall in the US.

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