Cattle Futures Rise to a Record as ‘Spectacular’ Demand Boosts Beef Costs

Agricultural , Commodities , Food Jan 15, 2012 No Comments

CattleCattle futures for April delivery climbed 0.9 percent to close at $1.264 a pound at 1 p.m. on the Chicago Mercantile Exchange. After the settlement, the price reached $1.2645 in electronic trading, the highest for a most-active contract since the commodity began trading on the CME in 1964.

Cattle futures rose as animal supplies dwindled in the U.S. and global beef demand climbed, boosting meat costs for restaurants including Sonic Corp. (SONC), a hamburger chain.

In the U.S., consumers will pay as much as 5 percent more for beef this year, more than other food group except seafood, after the meat rose as much as 10 percent last year, the government has estimated. The cattle herd was the smallest since at least 1973 as of July 1 after a drought in Texas cut supplies. Beef exports surged 25 percent in the 10 months ended Oct. 31 from a year earlier.

Rising global demand and the shrinking herd in the U.S., the world’s largest beef producer, spurred a 12 percent increase in cattle futures last year, the fifth-biggest gain among components in the Standard & Poor’s GSCI Spot Index of 24 raw materials. Retail beef reached an all-time high in November, signaling higher costs for Oklahoma City-based Sonic and Ruth’s Hospitality Group Inc. (RUTH), a steakhouse owner.

via Cattle Futures Rise to a Record as ‘Spectacular’ Demand Boosts Beef Costs – Bloomberg.

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Rod Sherkin

Rod is a former senior executive, responsible for Purchasing, for both Pillsbury and Ball Packaging back in the 80’s and 90’s. Since then, he has continued to work in the Purchasing field as both a consultant and founder of the website Propurchaser.com.

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