Cattle Prices Rise as Beef Profits Improve
US - Cattle prices rose, headed for the biggest weekly gain in more than a month, on speculation U.S. meatpackers will buy more animals for slaughter to meet rising demand for beef.
16 February 2007
1 minute read
The profit margin for processors has improved as beef prices jumped 10 percent to a one-month high since Feb. 2, outpacing the 2 percent rise in the cost of cattle.
"When you're looking at boxed-beef prices rise, that's friendly," said Jason Britt, an analyst at Central States Commodities, a brokerage in Kansas City, Missouri. "That gives the packers the ability to pay a little more."
Cattle for April delivery rose 0.125 cent, or 0.1 percent, to 96.4 cents a pound on the Chicago Mercantile Exchange. Prices, which are 6.1 percent higher than a year ago, reached 96.65 cents yesterday, the highest since Jan. 17, 2006.
The wholesale price of boxed beef rose to $1.5568 a pound today compared with $141.22 on Feb. 2, the U.S. Department of Agriculture reported.
Cattle futures, which were lower for most of the day, made a surge near the close of trading in Chicago as some feedlots held out for higher prices.
"Packers tell us the price and the only way we can get more is to hold out, said Bart Johnston, owner of Johnston Feedlot in Lindsay, Nebraska, earlier in the day. "That's why everybody's holding on -- trying to get more money."
Source: Bloomberg.com
