Will Declining US Cold Storage Supplies Push Retail Beef Prices Even Higher?

As the US summer grilling season kicks into full gear, seasonal demand for beef is pushing retail prices higher.

Compared to a year ago, US beef prices are about 8 per cent higher, and pork prices are up 10+ per cent. So is it just seasonal demand that’s pushing prices even higher?

The decline in cattle slaughter is depleting the supply of beef in cold storage, according to Ron Plain and Scott Brown, University of Missouri.

On the last day of April, stocks of frozen beef were down 0.9 per cent from the month before, down 21.1 per cent from a year ago, and the lowest for any month since the end of September 2010

Plain and Brown said compared to April 2013, total stocks of red meat and poultry in cold storage were down 17 per cent, but beef isn’t the only one with depleting supplies - pork is down 16.7 per cent, frozen chicken is down 15.3 per cent, and turkey is down 18 per cent.

USDA reports feedlot marketings were down 2.04 per cent during April, which is well in line with April steer and heifer slaughter which was down 2.15 per cent.

During the first four months of the year, US steer and heifer slaughter was down 3.8 per cent compared to January-April 2013. There was a 4 per cent increase in the number of cattle placed on feed during April that weighed less than 600 pounds. Placements of all the heavier weight groups were down in number.

April was the fourth profitable month in a row for cattle feeding. The Livestock Marketing Information Center says cattle feeders turned a profit of $30.78 per head on cattle marketed in April.

Fed cattle sales volume was heavy last week. Last week's cattle slaughter totaled 599,000 head, up 1.4 per cent from the previous week, but down 8.3 per cent from the corresponding week last year.

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