Beef Industry Fundamentals Grow Bleak

There is maniacal cackling being heard from headquarters, as this article is being read aloud, re-read, and read yet again. Nearly every sentence brings horrible news to the cattlemen, and here’s one of the best:

The highest corn prices since at least the Civil War, based on Chicago Board of Trade data, mean U.S. feedlots are losing money on every animal they sell, discouraging production as rising global incomes increase meat consumption and a declining dollar spurs exports.

How much money are feedlots losing? In April, nearly $140 per animal. And other participants in beef production are getting creamed as well: Steakhouse Partners, Inc, with 21 restaurants in the US, filed for bankruptcy in May, blaming increased beef prices. And things are about to get worse for beef restaurants and retailers: beef prices are expected to rise 16 percent next year.

Of course, what’s great news for cattle is horrible news for chickens. Expect consumers to eat more poultry than ever, as the vastly better efficiency of “broilers” means that the price of chicken will become increasingly attractive when compared to beef or pork. Link.