Increasing Price of Beef

Read carefully the attached article that appeared a few months ago and comment on it.


The 2012 January 1 Cattle report from USDA shows U.S. beef herds at their lowest number since 1952. Producers have begun retaining more heifers for breeding, which eventually should turn the trend around. But removal of those females from feeder-cattle supplies will mean U.S. beef production will shrink even more before it begins to grow.
The USA Today article notes that USDA projects retail beef prices, currently at record levels, will increase by another 4 to 5 percent this year. The article quotes Drovers/CattleNetwork’s economic consultant John Nalivka of Sterling Marketing, saying beef prices could rise even faster, as much as 10 percent this year. Nalivka also notes that as cattle prices have climbed to record highs, packers have absorbed significant losses as wholesale beef prices have not kept pace. Retailers also have resisted passing all of their higher beef costs on to consumers.
Even so, retail prices for Choice beef and all fresh beef set new records in December according to USDA’s report on meat price spreads last week. The report lists the average retail price of Choice beef for December at $5.02 per pound, up from $5.00 in November. For the fourth month in a row, the Choice price set a new nominal high.
The role of beef exports in higher U.S. cattle and beef prices is well documented, but domestic demand also has held up surprisingly well. University of Missouri economist Ron Plain, PhD, reports that based on preliminary data, , beef demand was up 4 percent in December and up 1 percent for all of 2011. Beef demand was down in 2008, 2009 and 2010, largely due to the economic downturn.
Continued inflation in retail beef prices, however, eventually could threaten domestic and international demand for U.S. beef, resulting in lost market share to other proteins or other beef exporters. To address these threats, Drovers/CattleNetwork will this week launch MoreCowsNow.com, an in initiative intended to supply producers with tools and information to cost-effectively expand their herds.
Fortunately, last-week’s Cattle report shows a slight shift in the long-term liquidation trend for U.S. beef-cow numbers, with the number of replacement heifers up by 1 percent over one year ago. The increase suggests producers in areas with adequate moisture have begun responding to market signals to expand their herds or sell replacement heifers, which have gained considerable value recently.
A state-by-state listing of beef replacement heifer numbers in the report reflects regional differences in precipitation and forage supplies during 2011. Oklahoma replacement heifers are down by 15 percent and the Texas figure is down by 10 percent.  In contrast, beef replacement heifers are up by 29 percent in Colorado, 17 percent in Iowa, 18 percent in Nebraska, 14 percent in South Dakota and 18 percent in Wyoming.
If weather conditions allow it, the trend toward more heifer retention is likely to continue and accelerate over the next few years. Until significant numbers of those additional heifers produce calves, and those calves reach market weights, calf and feeder numbers will remain tight. Prices for all classes of cattle are likely to continue upward, as will retail beef prices. The next couple years will be interesting times in the U.S. beef business.

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Are You Ready to Buy American?

The big three American car manufacturers have come back from hinterland. Some reviews actually claim that many US products are either at or very close to the cutting edge in their respective class. The Ford Focus might become the best selling car in the world, The Cadillac ATS is challenging BMW 328 for becoming the sporty performance sedan, Chrysler is setting sales records with its Challenger and Ram and then there is the Vette, a best buy for the money of any sports car in the world.

Are you ready to buy American? Read the following recent sales report and write your comments under your own name.

Chrysler reported U.S. sales up 14% in August vs. a year ago -- driven by a 19% increase for its Ram pickups.
Ford sales rose 13%, also led by pickup sales, while GM rode good sales for Chevy cars to a 10% gain in the U.S. for August.
CHRYSLER: The Fiat-owned company sold 148,472 vehicles in the month, more than 25,000 of them pickups. It was the best August for Ram since 2007. Helping drive those sales likely were deals -- incentives on the Ram 1500 pickups averaged $4,289 in the month, according to Edmunds.com.

European makers: VW sales boom -- again
Asian makers: Honda, Toyota boom; tight supply limits Hyundai

The company just refreshed its Ram 1500 flagship pickup with upgrades and a new V-6 and 8-speed transmission combination that raised fuel mileage by 25%.
Other highlights:

• Dodge was the volume leader, with more than 47,000 vehicles sold, up 13% and the best August since 2005. The Avenger and Challenger had their best August and the Journey crossover had its best month ever. The Grand Caravan minivan was up 35%. Worrisome for the brand: The redone Durango 3-row SUV was down 45% to 2,884 sold.
• The new 2013 Dodge Dart compact, ramping up production now in its third month out, had sales of 3,045.
• The Fiat brand, still getting established with the 500, was up 34% from a year ago to 4,150 sold.
• Chrysler brand was up 25%, also the best August since 2007, and the big 300 sedan was up 65%, while the Town & Country minivan was up 30%.
• Jeep brand sales rose just 5%, but it was the best August for the brand since 2003 on strong Wrangler and Grand Cherokee results.

Ahead of today's sales reports, analysts have predicted a strong month, up 15% to 20% from last August, with an annual sales rate for the month north of 14 million.
FORD MOTOR'S F-Series pickup trucks -- the best-selling U.S. vehicle this year -- drove a 13% rise in the company's U.S. sales to 197,249 vehicles. F-Series sales were up 19% and it was the volume leader at 58,201 trucks sold.

CAPTION

By Ford

Also showing strong sales growth were new 2013 Escape and outgoing 2012 Fusion. Ford sold 28,188 of the new Escape, up 37% over the old model a year ago. And sales of the Fusion -- ahead of the redesigned 2013 model due this fall -- were up 21% to 21,690.Sales of the Focus compact were up 35% to 19,073 and Mustang rose 12% to 6,387.
Ford said it added a third shift at its Louisville Plant in August to build more Escapes, which was its fastest turning vehicle in the U.S. in August. And it said its more-profitable retail sales overall were up 19% vs. a year ago.
GENERAL MOTORS' August sales were up 10.1%, powered by Chevrolet cars, though all four GM brands were up.
GM credited heavy ads during the Olympics for boosting with Chevy car sales 25% in August vs. the year-ago month. Trucks underperformed cars, though, and Chevy's overall increase for the month was 11.3%.

CAPTION

By GM, Wieck

Chevy's Sonic subcompact, Cruze compact and Volt extended-range electric compact sedan all set records. Volt wound up at 2,831 for the month, even better than the 2,700 Chevy had predicted last week. Sales of the Chevy Spark mini-car continued to climb."Small-car performance is what's most impressive about GM's numbers today. Cruze, Sonic, and Spark were all unknown nameplates just a few years ago, but now they almost equal the volume of Silverado (full-size pickups), the core of Chevy's identity," Edmunds.com analyst Jessica Caldwell says.
Chevy Equinox SUV posted its best August sales ever, GM reported.
All-in, GM sold 240,520 cars and trucks in August, up from 180,922 a year earlier.
Other brands:

• Buick was up 12.4%, aided by rising popularity of the Verano small sedan. Best August since 2006, Buick says and on track for best year since 2006.
• Cadillac was up 11.3%, helped by the new XTS big sedan.
• GMC, which sells only trucks and SUVs, rose just 3.7%, despite strong performance by the Terrain and Acadia SUVs.