June 7, 2004

Cattle Prices Up In The US

Cattle futures touched a five-month high last week in Chicago on signs that grocers and food-service companies are buying more beef after meat prices fell last month.

Cattle prices are up more than 15 percent the past two months as U.S. feedlot herds shrank and traders anticipated a seasonal increase in outdoor grilling.

Meat prices are "on the mend because beef demand improves into Father's Day and the Fourth of July holidays," said Walt Hackney, president of feedlot operator Hackney Cattle Co. in Omaha. "It's not just steak grilling, because demand for hamburgers will be strong as well this month."

Cattle for August delivery rose last week on the Chicago Mercantile Exchange to its highest closing price since December 23, the day the government disclosed its first-ever U.S. case of mad cow disease. The disclosure prompted more than 40 nations to ban imports of U.S. beef.

Cattle futures have risen 26 percent from 71.375 cents a pound on Feb. 4, the lowest this year, as domestic demand for beef surged because of the popularity of high-protein, low-carbohydrate diets.

"Packers need cattle to meet increased demand," Hackney said. "I'm pricing my cattle at 90 cents and expect packers to be aggressively bidding for animals."