Price for Young Cattle Improving

US - Economists believe demand for beef could be better in 2010 - and consequently prices for young Montana cattle are improving.
calendar icon 10 November 2009
clock icon 2 minute read

Auction prices for the young, lightweight cattle have increased $1 to $2 per hundredweight for each of the last two weeks as buyers look for animals that won't be fat enough for market until the economy improves reports The Billings Gazette

The upward prices are good news for one of the Montana economy's major bread winners. Beef prices have been down 10 per cent or worse each of the last two years.

"Really it's a reflection of the demand for beef, if folks are thinking they may see some rebound in demand in the incoming year," said Gary Brester, Montana State University economist. "I've seen a couple dollars movement in price. It's not huge, but it's nice to see."

Beef suffers when the economy sours because bargain shoppers turn to cheaper meats like pork and chicken. Business at restaurants, where beef does well, also slows. Those domestic factors, combined with sagging sales to foreign markets, have put the cattle industry on shaky legs this recession.

The recent uptick in prices for would-be feedlot cattle took a hit last week after the US government announced that unemployment reached 10.2 per cent last month, the highest rate in nearly 27 years.

Light cattle take more time to bulk up before they're sent to slaughter.

Rob Fraser of the Miles City Livestock Commission told The Billings Gazette that it would be several months into 2010 before light feeder steers and cows selling at his auction yard recently were ready for slaughter.

Mr Fraser sees interest increasing for light feeder cattle as improving weather in Oklahoma and Texas give buyers dry wheat stubble fields on which cattle can be grazed.

The US Department of Agriculture expects food prices in general to rise as much as 4 per cent in 2010. After long periods of losses by beef, dairy and cattle producers, prices will go up simply because price-weary farms and ranches are raising fewer animals.

The US dollar is trading lower, which could mean better beef sales in Asian countries where economies are beginning to warm.

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