October 26, 2004

US Cattle Prices Fall Amid Japan Beef Trade Speculation
 

Cattle futures in Chicago fell on speculation that US beef exports to Japan will be slow to resume amid ample supplies of US animals.

Japan on Oct. 23 agreed to ease its ban on US beef, imposed in December because of mad cow disease concerns, saying it would accept some beef products from animals 20 months of age or younger. Analysts say the US and Japan have yet to agree on how to determine an animal's age and that may take months.

"This deal may be a long, drawn-out affair before a major resumption in US beef sales,'' said Steve Meyer, president of Paragon Economics in Adel, Iowa. "There are plenty of cattle ready for slaughter before beef trade improves.''

Cattle futures for October delivery fell 0.85 cent, or 1 percent, to 87.175 cents a pound on the Chicago Mercantile Exchange. Prices have fallen 3.9 percent from Dec. 23, 2003, when the US announced a dairy animal in Washington state had been found with mad cow disease, the first case in the nation's history.

The agreement comes amid ample cattle supplies. Total US cattle in feedlots Oct. 1 rose 2.6 percent compared with a year earlier, the US Department of Agriculture said on Oct. 22 Japan bought $1.7 billion of US beef or beef products last year and was the largest overseas customer for the meat. The nation may begin importing a small quantity of US beef by the first of the year, said Ron Plain, agricultural economist at the University of Missouri in Columbia.