Food Business News - February 10, 2015 - (Page 26)

Market Insight More cattle but beef prices still rising Processors and consumers will be faced with record high prices throughout this year .S. cattle numbers as of Jan. 1 increased 1% from a year earlier, according to U.S. Department of Agriculture data. It was the first rise in the Jan. 1 inventory since 2007 and indicated producers were solidly in the rebuilding phase of the cattle cycle. Still, the herd count remains the second lowest since 1952. At the same time, beef supplies are forecast to further contract and beef prices to keep rising from already record high levels. In its annual Cattle report, U the U.S.D.A. estimated total cattle and calves on farms at 89.8 million head, up 1% from 88.5 million on Jan. 1, 2014, and the second lowest since 88.1 million on Jan. 1, 1952. The number was down 13% from the most recent peak of 103.5 million head on Jan. 1, 1996, and was down 32% from the all-time high of 132 million on Jan.1, 1975. Analysts generally see cattle numbers rise and fall in 10-year cycles, from peak-to-peak or trough-to-trough, with numbers declining when profits are poor and increasing when profits show sustained improvement. The cattle cycle is by far the longest of the major domesticated meat animals because cows tend to have only one calf per year with a 9-month gestation period, and heifers bred for calving don't have their first calf until they are about two years old, and it will be another 20 months or so before that calf leaves the feedlot for the packing plant. Plus, heifers kept for breeding are not available 2015 cattle inventory in thousand head 140,000 120,000 100,000 80,000 60,000 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Source: U.S. Department of Agriculture 26 FOODBUSINESS NEWS ® for slaughter in the rebuilding phase of the cycle, thus potentially reducing beef supplies. In contrast, the hog cycle is only four years from peak-to-peak. While the cattle cycle remains in evidence, it has been in a general down trend since 1975 after a near 100-year uptrend prior to that (most noticeably since the 1930s). The cycles also have tended to lengthen the last few years. The rebuilding phase was evident in the number of heifers kept for beef cow replacement indicated by the U.S.D.A. Beef replacement heifers on Jan. 1, 2015, were estimated at 5.8 million head, up 4% from a year earlier, with beef heifers expected to calve during the year up 7%. The number of beef replacement heifers actually began increasing year-over-year in 2012 when numbers went up 1%, followed by 2% gains in both 2013 and 2014, while total cattle numbers declined 2% in each of those three years. Record high feed prices in 2008 and again in 2013 following drought in 2012 preceded herd liquidations after a brief upturn in 2007. For consumers, who have February 10, 2015

Table of Contents for the Digital Edition of Food Business News - February 10, 2015

Food Business News - February 10, 2015
Hershey continues move into snack categories
Renewed school food fight looming on the horizon
Beverage Business News - Colorful ways to quench a thirst
Table of Contents
Web Contents
Editorial - Oil and currency moves should be seen as threats
McCormick eyes ambitious growth in year ahead
Dunkin’ to debut cold blended beverage platform
Campbell Soup in the midst of reorganizing
The future of shopper marketing
JBS USA plans expansion at Utah beef plant
Large MOM multiples
More tough times ahead for McDonald’s
Inside Wendy’s menu strategy
Chipotle on fire
Diamond acquires stake in potato chip maker
Market Insight - More cattle but beef prices still rising
Health and Wellness - On the cutting edge of digestive health
Ingredient Innovations - Backing up satiety benefits
Company Profile - Tyson Foods flying high
New Food Products
Ingredient Market Trends - Soybean oil market pulled lower, then higher
Ingredient Markets
Supplier Innovations and News
Ad Index
Food Business in the News

Food Business News - February 10, 2015