Fewer Cattle Contributing To Higher Prices

The worst U.S. drought in a half century and record feed prices are spurring ranchers to shrink cattle herds to the smallest in two generations, driving beef prices higher.

Beef output will slump to a nine-year low in 2013 after drought damaged pastures from Missouri to Montana, the U.S. Department of Agriculture estimates. The domestic herd is the smallest since at least 1973, and retail prices reached a record last month, USDA data show.

Retail beef reached an all-time high of $4.72 a pound in July, according to the USDA's composite price, which includes choice beef, other beef and hamburger values.

Feedlots are losing $300 a head this month fattening cattle for slaughter, after corn surged 61 percent since June 15, University of Missouri data show. Greeley-based JBS SA, the largest beef producer; fast-food chain Wendy's Co.; and Greenwood Village-based Red Robin Gourmet Burgers Inc. are among those planning price increases.

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