Meat going the same route as dairy?

Dairy farmers are all encouraged by next season's prospects for milk returns.  But what about the outlook for beef?

If you are in the industry you will have paid keen interest - but if not you may not have noted the trends originating in the USA.

Beef used to trade in the range of US80c to US120c per pound.  But the price for 95CL lean beef is now nudging US180c per pound.  This is a great price considering that at the height of the commodity boom in 2008 we saw prices briefly touch US200c per pound. We are not that far away and all the predictions show a shortage in beef supply for the 2010 calendar year.  With a weakish currency expect some good returns.

With profitability returning to US beef production, a rebuilding of cattle numbers is expected - which if it occurs will only add to the shortage and underpin pricing. Feedlot placements are below expectations and recent reports have added fuel for a rally that's already sent Chicago cattle futures up more than 15 percent since the end of 2009. With the outlook for beef supplies tightening, cattle prices later this year are expected to climb further, and futures and deferred contracts are very likely to reach new highs according to some analysts.

With record prices for NZ lamb in Europe all we need is a weakening against the Euro and Pound for very good prices for lamb.  But perhaps that is too much to ask?

(Some of this material has been sourced from Mike Petersen, Beef & Lamb NZ).