Analyst: Meat prices may rise up to 8% in 2013
Consumers may be paying anywhere from 5 to 8 percent more for their beef, pork or chicken products in 2013, reports a market analyst. Randy Blach, vice president for CattleFax, told nearly a thousand cattle producers attending the 100th convention of the Kansas Livestock Association that consumer meat prices will rise to record highs because livestock production has fallen dramatically after ranchers culled animals during this year's drought, reports AP.
Ranchers sold livestock they couldn't afford to feed after the drought dried up pastures, cut hay production and drove up the price of corn and other feedstuffs.
Blach said roughly 70 percent of the nation's cattle herd has been affected by drought this year, the fourth in a row with drought in at least some key cattle-producing areas. This year's drought, which covered two-thirds of the nation at one point, has been among the worst in 100 years, he said.
The culling is slowing now, but Blach estimated that the nation's herd will be down by 1 million cattle by the time the government releases its semi-annual cattle inventory in January.
He predicted at least one major meatpacking plant and several feedlots will likely shut down as slaughter numbers continue to decline.
"We have a lot of excess feeding capacity, we have a lot of excess packing capacity. We will likely see some closures start within the next 12 months," Blach said. "And that is never good because once you start seeing them close, and it is always particularly from a packing standpoint, it is tough to get them back open."