Source:  Rita Jane Gabbett, MEATINGPLACE.COM, 10/22/09

Beef and cattle prices are more directly impacted by changes in economic prospects than pork or poultry markets. Therefore, as the economy recovers so should beef and cattle prices, according to Purdue University Extension Economist Chris Hurt.

Even as beef production had declined, beef and cattle prices have tumbled with the economy. In the first nine months of 2009, beef production was down five percent but finished cattle prices were almost $11 lower than in the same period last year, Hurt noted in a report.

Indications that economic recovery is beginning include: the rise in the average length of work week, rising building permits, falling numbers of new claims for unemployment, and the rising stock market. The recovery is expected to be slow by historic standards, but should slowly bring beef and cattle prices back up with it, according to Hurt.

He sees positive fundamentals for beef as well, with production expected to continue to drop as both export and domestic demand improve as the economy recovers. Hurt expects per capita available supplies of beef in the United States to decline by 2 percent over the next 12 months.

He predicted Nebraska finished steer prices will rise from the current low $80s per hundredweight to the middle $80s by the end of the year, extending into the mid-to-higher $80s in the first quarter of 2010. Early spring daily highs could move into the very low $90s or higher depending on the strength of the economic recovery. Even though summer prices normally are a few dollars lower, Hurt expects prices in the summer of 2010 to stay in the low to mid $90s.

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