Last month, the Agriculture Department reported the U.S. cattle herd had declined to 90.8 million animals. That's down 2 percent from last year and the lowest inventory since 1952.
Economists say already high retail beef prices could climb as much as 10 percent per year in 2012 and 2013, and the spike could be even greater if demand from other countries increases.
The immutable law of supply and demand was at work in the grain markets as well this week, but when the Agriculture Department failed to revise previous estimates significantly, the trade offered a muted response.
USDA officials lowered domestic corn ending stocks by 45 million bushels to 801 million bushels. While that’s only a 5 percent change from last month the figure is still nearly 30 percent lower than last year and it leaves little room for adversity during the growing season. The downward move, based on reduced competition for the export market, prompted USDA to narrow the seasonal average for corn prices by a dime making the range $5.80 to $6.60 per bushel.
Government analysts left U.S. soybean ending stocks unchanged at 275 million bushels after ratcheting those numbers up in January. With exports projected to be down slightly over last year, the price range has been squeezed by 15 cents over January’s report to between $11.10 and $12.30 per bushel.
And USDA lowered domestic wheat ending stocks 25 million bushels to 845 million bushels as export numbers got a boost over last month. While only 2 percent lower than last year, federal officials increased the sales range 20 cents putting U.S. wheat prices between $7.15 and $7.45 per bushel.
The market took the information in stride posting minimal gains for corn and soybeans as wheat moved slightly lower on Thursday on the news.