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Cost of red meat likely to rise in 2014

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.

Red meat markets are poised to be an issue for foodservice operators in 2014.

December’s USDA cattle report showed that new placements onto feedlots in November fell 7 percent year-over-year. Total feedlot inventories are historically low for this time of year at 10.72 million head, 5.5 percent below a year ago and 6.8 percent below the five-year average.

The USDA is forecasting U.S. beef output to decline 5.7 percent in 2014 and to be 6.4 percent lower in the second half of 2014 versus 2013.

In December’s USDA Hogs and Pigs Report, all key numbers — total hog inventories, breeding stock and market hog inventory — were lower than expected due Porcine Epidemic Diarrhea virus (PEDv). The USDA, as recently as in December’s Livestock, Dairy and Poultry Report, projected a 5-percent drop in hog prices for 2014. That forecast is now likely to be revised to be closer to 2013 levels.

Contact John T. Barone at [email protected].

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