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.
Friday’s USDA cattle report showed feedlot inventories at 10.7 million head, down 3.3 percent from last month but still 2.7 percent above a year ago. New feedlot placements in June were 1.8 percent below last year. Separately, the USDA’s semi-annual cattle inventory report showed total herd numbers (on and off feedlots) at 97.8 million head, down 2.2 million from a year ago and the lowest July number in 25 years.
The 2012 calf crop is 2.3 percent smaller than a year ago. Ranchers continue to liquidate as the U.S. struggles with the biggest drought since 1988. Fifty-four percent of cattle pasture is rated poor or very poor and feed prices are skyrocketing.
The percentage of U.S. corn rated good or excellent fell to just 32 percent last week and could drop further in today’s crop rating report. Corn futures prices, which were $5.51 per bushel on June 1, have soared 49.6 percent to close at a record high of $8.24 on Friday.
Contact John T. Barone at jbarone@mktvsn.com.
