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High meat prices - read 'em & weep

M maxqMember
Received this today from a purveyor...not good Frowner

High beef prices 'here to stay', says Tyson boss
High beef prices "are here to stay", boosted by the squeeze on US cattle numbers which may take until the end of the decade to return to 2013 levels – and will provide an "umbrella" protecting chicken sector fortunes.
Donnie Smith, the chief executive of Tyson Foods, the top beef packer in the US ahead of JBS and Cargill, said that domestic supplies of the meat, which fell 5% on the group's estimates this year, will fall 4% next year too as producers attempt to rebuild herds.
The US cattle herd entered this year at its smallest in 61 years - in part a reflection of higher productivity levels, allowing more beef to be produced from fewer animals, but with the trend accelerated in recent years by drought and high feed prices which have encouraged higher slaughter rates.
However, ranchers this year have begun rebuilding herds, encouraging by the reversal in grain prices, and recovery in pasture in most areas from the 2012 drought, but also by elevated cattle and beef values as the flow of animals for slaughter has dwindled.
The number of cows being slaughtered has fallen particularly far, by 17.9% in the first 10 months of 2014, thanks to the quest to retain animals for breeding.
'High beef prices'
Even so, "it would take us several years, maybe out to 2020, to be able to grow the supply of cattle back to a 2013 number", Mr Smith told investors.
"So we are going to have high beef prices for a while."
The US Department of Agriculture has forecast beef prices rising by 5% next year, on top of an 11.5% increase in 2014.
The so-called beef cutout, the wholesale price, was $249.95 per hundredweight for the more expensive choice grade on Wednesday, down $0.56 on the day, but remaining within sight of the summer's record high above $260 per hundredweight.
"We've got a $250 of hundredweight choice cutout right now. You go back a year ago it was at $199," said Steve Stouffer, Tyson's head of fresh meats.
'We need more chicken'
The increase in beef prices will "provide an umbrella" for price of other meats, Mr Smith said, highlighting in particular the impact in diverting consumers to chicken.
"Chicken consumption is up. We see chicken consumption up at least 3% or so for the next few years out in the future.
"We need more chicken," he said, flagging a drive by Tyson to raise capacity, with the impact likely to be felt particularly in the fourth quarter of the group's current financial year, which ends in September 2015.
"We are literally holding foodservice customers off," he said, also noting a "production problem this fall".
Extra chicken supply "is coming" and is "going to be great".
"We will buy it and add value to it and fill customer demand with it."
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cal 2cal 2Member
On a side note, pork butts at Sams have come down to 1.48/lb. Smiler

I'm seeing bigger briskets with more fat/marbling at Sam's also. My thoughts are that the ranchers are finally able to feed and keep their stock longer now that the prices are at a point they can make money, instead of breaking even on the high grain price.
idahomikeidahomikeMember
With the droughts in the Western Part of the US The usual grazing ranges are dry and sparse. The main food crops for cattle are corn and hay. These are water intensive crops, and when the water levels for the farms are very limited, The farmers turn to other crops that require less water. This raises the price of feed. Then there is the ethanol fuel producers buying corn to run their businesses, and this just drives the cost of meat higher, and this includes poultry and hogs. This is all turning into the perfect storm. The Ranchers have had to reduce the size of their herds due to lack of water and feed.

There are several ways around this if you have the room in freezers to keep a hog, and a beef. Go to the County fair. All of the animals that these FFA and 4H kids raise get put up for sale at the end of the fair. Don't bid on the first animals that get run through the auction ring. These things do have a method and madness to them. Wait until the big businesses have bid on the very top animals, Wait until you start seeing the animals that got knocked down in points because they didn't conform, Didn't show well, or were "Over Weight". These animals do not bring as much per pound as the "Top" animals. The kids that raised them simply didn't work with the animal enough to be in the show ring, or over fed them. Some of the best marbled meat I have seen came from an "Over fed" animal. Yes. you are paying the "on the hoof" price for the beef, and are going to have to have it butchered or do it your self. There are a lot of butchers around that will do this for you and you can tell them how you want it aged, cut and wrapped. If you can't handle a whole beef or hog, find some one else that wants a half or quarter of it. in the end you get good meat at a better price, and your dollars go to the kids that raised these animals, and local businesses.

I guess my Loving and long suffering wife who was raised on a farm/ranch, and was involved in both 4H and FFA has rubbed off on me over the years.
T tomMember
Well,KCBS board has been threatening to change chicken entries to dark and light meat both in the box.

Remember when the meat inspectors made you show them your packers still sealed at the comp-instead of trimmed out at home.You'd have to carry 5-6 packers,so you could throw away 2 or 3 the cutters sliced all thru the flats Mad

Maybe ,they'll replace beef brisket with yardbird brisket? Eeker

Of course John,since we had to drive the whole South to get to every qualifier every week,what we'd make up in fuel over 1500 miles,we could buy extra packers cheap. Big Grin

Ah,for the good ol' days. WinkRemember we'd be driving into the Everglades this weekend for the first qualifier in the points chase for the year.Happy New Year.
Last edited by tom
A astronorickMember
We've been watching these beef prices for a while, and finally raised meat prices across the board at the restaurant. We also raised chicken and pork prices to help offset the steeper climb in Beef prices. Hate seeing the climb in Brisket prices, but I'm beyond thankful that our base of patrons love how we're doing brisket. Even at it's higher cost, it was still the best seller last weekend.

I guess we'll all be riding out beef prices for a few years.
Rick
W wilberMember
Just received the my monthly commodity report, thought I would share:


Beef - Beef production last week declined 3.2% and was 7.9% less than the same week a year ago as beef packers slowed output due to poor margins. Cattle slaughter last week was the smallest for any non-holiday week since March. Despite this, beef prices were generally soft with holiday demand subsiding. The December 1 cattle on feed inventory was
1.4% larger than 2013 while cattle placements into feedlots during November were down 4% from the prior year. The slaughter ready cattle supply appears to be backing up which could temper the anticipated beef production declines vs. the previous year this winter. Still, beef prices should remain historically expensive.

Analysis – Same story, different day. Beef prices remain at historically high levels with no relief likely until the end of ’15 at the earliest.


Pork - Pork output last week rose 2% but was 1.2% less than the same week a year ago. Last week's hog slaughter was the biggest for any week in a year. Pork production typically seasonally peaks during the late fall but the cyclical decline in output this winter is projected to be one of the smallest in the last 30 years. This should mitigate any pending pork price increases during the next few months. Still, the downside price risk in pork bellies from here is almost certainly nominal. Ham prices could find a bottom soon also.

Analysis – Bacon pricing continues to be a value offering with little likelihood of increase anytime soon. Reports are indicating that hog supplies have recovered following the devastating effects of PEDv in ’13 and ’14. This is a good sign for pricing and supplies in ’15. What will exports do in ’15? Right now the European economy is in turmoil suggesting that exports to that market will not increase anytime soon further supporting moderate pricing in the US.

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