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 10.99 million head, a 3.2-percent increase (seasonally) from last month but a 2.6-percent decrease from a year ago. New feedlot placements in September were 2.0 million head, 19 percent less than a year ago and the lowest September placement number on record.
Cattle feedlot numbers are on pace to be 5 percent to 6 percent lower than a year ago by January. Cattle slaughter has run 10 percent below a year ago for the last two months. The USDA is projecting 2013 beef output to fall 3.8 percent from 2012 and noted, “It is likely that beef-cow herd expansion will be limited until feed grain prices decline to levels that will allow at least the anticipation of positive margins for cattle feeders, packers and retailers.”
The USDA’s 2013 cattle forecast remains at $127 per cwt, an increase of 4.3 percent from 2012. However, cattle futures contracts for 2013 are averaging $133, indicating a cattle price increase closer to 7 percent.
Contact John T. Barone at jbarone@mktvsn.com.