Although 5 percent more cattle were on U.S. feedlots during August compared with a year ago, analysts say that when the current bump in supplies is slaughtered and consumed, the U.S. may face a decline in beef supplies of as much as 4 percent next year.
That means higher prices for consumers. “Prices will go up, no question about that,” said analyst Rich Nelson of Allendale in McHenry, Ill.
Here’s why: The U.S. Department of Agriculture said in a monthly report that there were 10.7 million cattle on feedlots during August. But the number of new placements into feedlots fell by 1 percent, to 2.25 million.
Des Moines cattle trader Kevin Penner of Ag Trader Talk said: “The drought was so bad down in Texas that they were selling every creature they had. That’s good for supply in the short run, but we’ll be breeding fewer animals next year.”
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