December 7, 2012

JBS expects high cattle prices in 2013

 

With a drop in beef production, JBS S.A. is expecting record high cattle prices in 2013.

Wesley Batista, CEO of JBS SA, said in an interview that beef output will ease as much as 6% in 2013, and that cattle prices will advance 20%. The USDA is forecasting a 4.2% decline in beef production.

Surging feed costs spurred by the worst drought in 50 years increased the cost of raising cattle, prompting ranchers to cull cattle. Batista said that ranchers will probably rebuild herds next year, which means more animals will be kept on feed instead of being sent to slaughter.

Meanwhile, average retail steak prices climbed to more than US$4 per pound in October, according to USDA. The price of steak has jumped 19% in two years on droughts in 2011 and 2012 that have damaged rangeland in Texas, the country's biggest cattle producer.