In this weekly Commodities Watch column, John T. Barone, president and commodities analyst for Market Vision Inc., offers a snapshot of the state of commodities for restaurants.
Friday’s USDA cattle report showed feedlot inventories at 11.86 million head, a decrease of 7.0 percent from a year ago. Feedlot placements in February were 13.5 percent below last year, and the numbers are expected to continue falling into summer. Beef output in the first quarter will be nearly 2 percent below a year ago.
Drought conditions that have plagued the cattle industry for two consecutive years are not expected to improve. In its three-month U.S. spring outlook, the National Oceanic and Atmospheric Administration said that drier-than-normal conditions are most likely to occur in the western and southwestern parts of the country and much of Texas.
But declining beef demand has helped improve cattle and beef prices. April 2013 cattle futures are trading at $126.20/cwt, roughly $2 below where they were a month ago. Forward contracts for April 2014, at $129.20/cwt, are $4 below last month.
Contact John T. Barone at [email protected].