031120 Economist Says Boxed Beef Prices Have Peaked

Kansas State ag economist James Mintert says recent weakness in wholesale beef prices could be indicative of retailer’s shifting their focus to competing meats as consumers react to higher beef prices. He says it appears boxed beef prices have peaked.

Mintert says shrinking per capita beef supplies in the U.S. and strong beef demand have been the driving forces behind the rally in beef and cattle prices. "The biggest year-to-year decline in beef production during 2003 will take place during October-December," he notes. "As a result, domestic per capita beef supplies this fall are expected to decline 7%, to as much as 8%, below 2002’s."

As a result, he says to expect tight domestic supplies to keep cash prices primarily in the $90’s/cwt. the rest of the fall, "although prices could dip into the high $80’s by late fall," he adds. "Longer term, supplies are expected to remain below year-ago levels through the first half of 2004, which should support slaughter steer prices in the $80’s during January-June 2004."

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