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Wednesday, July 25, 2012

Beef Prices Prediction 2012

Beef Prices Prediction 2012 : Dairy, pork and beef, all produced by animals that are on feed longer, will follow, Lapp said before today’s report, raising food inflation next year to 4.5 percent, about 2 percentage points more than it would otherwise have been. The effect will carry over into 2014, adding half a percentage point to the previously expected jump in prices, he said.

Beef may even see a short-term decline, Lapp said, as meatpackers slaughter animals earlier to avoid the higher corn costs, temporarily increasing supply. The USDA today lowered its forecast for increases in beef prices for 2012 half a percentage point to 3.5 percent to 4.5 percent.

Still, the reduced beef supply may increase pressure on prices in the longer term, since the U.S. cattle herd, which on July 1 was at its lowest for the date since 1973, may shrink further, he said.

The drought in the U.S., the biggest corn exporter, may push up food prices worldwide, possibly discouraging central banks from easing monetary policy, Merrill Lynch Health Management said yesterday in a report. In the U.S., because nutrition accounts for only about a seventh of the Consumer Price Index, the impact of rising costs on overall inflation may be small, according to Paul Dales, senior U.S. economist for London-based Capital Economics Ltd.

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