July 28, 2006

US heat wave lowers beef prices in the short term

Analysts are predicting that the current US heat wave may lower beef prices in the short term but raise prices in the long term, a newspaper in Kansas reported Thursday (Jul 28).

Prices would be lower for consumers as cattle are sent to feedlots one to two months early as grazing grounds run short, said Jeff Davidson, Kansas State University extension agent. The drought  has also affected cattle feed prices such as hay, which has nearly doubled in price this year.

The situation is unlikely to improve even during the fall harvest as the drought conditions would have reduced yields, he said.

For the long term, however, it may mean higher cattle and beef prices. Sending cattle to slaughter early disrupts the rebuilding of the cow herd and affects beef production next year said Danny Herrmann at Ford County Feeders. Instead of the expected 1 to 2 percent rise next year, beef production could remain stable.