A prolonged drought from Kansas to Texas probably forced U.S. ranchers to sell more cattle to feedlots last month, signaling increased supplies for meat processors including Tyson Foods Inc. (TSN) and lower beef prices.
Deteriorating pasture conditions in the southern Great Plains and record cattle prices prompted the sale of 1.935 million head to feedlot operators, up 4.2 percent from March 2010, according to a Bloomberg survey of 14 analysts. The U.S. Department of Agriculture will disclose the feedlot inventory today at 3 p.m. in Washington.
As the animals near their slaughter weights in the next three or four months, retail-beef prices may slip from all-time highs and cattle futures may drop 14 percent from a record $1.21625 a pound reached April 4, said Troy Vetterkind, the owner of Vetterkind Cattle Brokerage. More cattle will reduce costs for processors, including Tyson and JBS SA (JBSS3), and wholesale meat buyers such as Morton’s Restaurant Group Inc. (MRT)
To read the rest of the story, please go to: Bloomberg
