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.
The December USDA cattle report showed feedlot inventories at 11.33 million head, down 6 percent from a year ago. November feedlot placements at 1.92 million head were better than expected but still 5.6 percent below last year.
Fewer cattle foreshadow record-high beef and cattle prices for 2013. In 2012, producers were able to offset lower cattle numbers with higher carcass weights that averaged 3.1 percent above 2011. As a result, beef output in 2012 managed to post a 1.3-percent increase. By contrast, 2013 beef output is expected to fall by 5 percent.
Cattle futures have jumped from $125.88 to $129.40 over the past three weeks. Forward contracts for 2013 are averaging $134, 9.4 percent above 2012. Friday’s USDA hog and pig report should be bearish for prices, with hog inventories decreasing just 0.04 percent and the breeding herd rising 0.2 percent.
The staff at Market Vision wishes you a happy and healthy new year.
Contact John T. Barone at jbarone@mktvsn.com.