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.
In last week’s Livestock, Dairy and Poultry Report, the USDA gave a bearish outlook for near-term beef prices, citing flagging retail demand in the face of high prices and a weak economy. The USDA also said that lingering drought conditions have supported a high level of heifer slaughter, which may add to near-term beef supplies.
Additionally, total U.S. cattle imports in 2013 are expected to be 13 percent below 2012, with decreases expected from both Canada and Mexico due to small 2012 calf crops in both countries.
But longer-term fundamentals are bullish for beef prices. Producers will eventually begin retaining heifers for breeding, sending fewer to slaughter and tightening beef supplies. This trend is expected to accelerate over the next few years until enough heifers have been retained to increase feeder cattle supplies and subsequently increase beef output.
Contact John T. Barone at [email protected].
