In this weekly Commodities Watch column, John T. Barone, president and commodities analyst for Market Vision Inc., offers a snapshot of the state of commodities for restaurants.
Retailers are focused on turkey and ham ahead of Thanksgiving, which traditionally means softer beef prices in November and December. But just about all beef market fundamentals are lining up for a perfect storm in the first quarter of 2014, where tight supplies will likely, once again, lead to record-high spring beef prices.
Cattle futures at $132.08/cwt have been steadily higher over the past two months. The April 2014 contract is trading at $133.45.
The USDA’s better-late-than-never cattle report showed that feedlot marketing, which rose 6.1-percent compared to a year ago, continued to outpace new placements, which rose 1.0 percent, in September. As a result, feedlot inventories have fallen to a 15-year low of 10.1 million head, a decline of 7.7 percent from a year ago.
Year-to-date cattle slaughter through October fell 1.5 percent, and the removal from the market of the feed additive Zilmax is expected to lead to a modest drop in cattle weights.
Contact John T. Barone at [email protected].