|
Glut grinds beef prices down
|
 |
July 31, 1998: 10:34 a.m. ET
A summer drought and the Asian crisis put cheaper cuts on the table
From correspondent Ceci Rodgers
|
NEW YORK (CNNfn) - Americans are savoring a rare treat -- the flavor of falling beef prices.
On average, a pound of beef at the meat counter runs $2.53, down a penny from last year and 6 percent below 1993 levels.
But what's good for beef lovers has been painful for the cattle industry. Prices for live cattle are the lowest since Oprah Winfrey swore off beef during a 1996 show on meat safety.
Livestock analyst Chuck Levitt says this time, though, the low prices are simply a matter of math. "What we have now is a huge over-supply...you could call it a glut...of total meat in the market," he said.
Demand from troubled Asia has dried up, along with grasses and forage in the major cattle producing state of Texas, hard hit by a summer drought.
And according to feedlot operator Jamie Willrett, that means that rather than keeping the cattle for breeding, many are going to slaughter. (151KB WAV or 151KB AIFF)
Analysts estimate feedlot operators have lost close to $2 billion since the Asia crisis hit last fall. Beef is just one commodity in an Asian-induced downturn, helping dampen inflation in the U.S.
Prices at the meat counter are low now, but even steeper discounts could show up this fall, as retailers attempt to move the glut of beef from their shelves and into consumers' freezers.
|
|
|
|
|
 |
|
