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 11.1 million head, no change from last month and 2 percent above a year ago. New feedlot placements in May were 15 percent above last year, reversing April’s 15 percent decline.
Drought is once again threatening the southern plains, pastures are drying up and the potential for further herd liquidation needs to be watched closely this summer. Meanwhile, steer and heifer slaughter is running roughly 5 percent below year-ago levels, and tighter supplies are helping support prices.
How bad is the global economic forecast looking? Bad enough for oil prices to drop below $80 last week despite Iran’s walking out on nuclear negotiations without resolution, an event that would have sent prices soaring just a few months ago. Crude oil futures at $79.26 per barrel are now 27.8 percent below their high of $109.77 set just four months ago on Feb. 24.
Contact John T. Barone at jbarone@mktvsn.com.