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 10.62 million head, a decrease of 0.2 percent from last month and a decrease of 0.6 percent from last year. New feedlot placements in July and August 2012 have averaged 11 percent below last year’s huge, drought-induced placements. That’s because last year’s drought was centered in Texas and Oklahoma cattle country, where toasted pastures forced herd liquidation. This year’s drought is in corn country.
Feedlots have been resisting lightweight placements as high feed prices have eroded their profits. And while pastures in Nebraska are gone, ranchers further south have been able to hang onto calves and feed them to heavier weights. As a result, summer 2012 placements have been heavily skewed toward the heaviest weight categories. Smaller beef cow herds and lack of lightweight placements point to very tight beef supplies for spring 2013.
Contact John T. Barone at jbarone@mktvsn.com.