Prices for young cattle extended a rally to a record, climbing for the 10th straight session and on pace for the longest rising streak since 1977.
The number of animals placed in feedlots in March fell 4.7 percent from a year earlier, government figures showed on April 25. Higher costs for the cattle, which are fattened on corn before being sold to meatpackers, signal an increase in beef prices that already are the highest ever.
The cattle herd in the U.S., the world’s largest beef producer, shrank to the smallest in 63 years as of Jan. 1, as ranchers struggled to recover from years of drought, government data show. Slaughter of young female cows, called heifers, dropped 7 percent in the first quarter from a year earlier, a sign that the animals are being held back for breeding.
"With the droughts and the liquidation we’ve had in cattle, we knew the final phase of this bull market was to try and retain heifers," Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa, said in a telephone interview. "And that means the feeder-cattle pool, which was already tight, continues to tighten."
Feeder-cattle futures for August settlement rose 0.5 percent to $1.914 a pound at 11:15 a.m. on the Chicago Mercantile Exchange, after reaching an all-time high of $1.917.
Retail ground-beef prices in the U.S. averaged a record $3.698 a pound in March, government data show, and wholesale beef has surged 14 percent this year, increasing expenses for restaurants including Chipotle Mexican Grill Inc. and Ruth’s Hospitality Group Inc. Pricier meat is helping to boost global food costs, which rose to a 10-month high in March, the latest United Nations data show.
Feedlot operators typically buy year-old animals that weigh 500 pounds (227 kilograms) to 800 pounds, called feeders. The cattle are fattened on corn for four to five months until they weigh about 1,300 pounds, when they are sold to meatpackers.
Cattle futures for June delivery fell 0.3 percent to $1.388 a pound. Hog futures for June settlement dropped 0.2 percent to $1.22575 a pound.