The number of cattle being fattened for beef rose by more than expected last month while meat in cold storage surged as a severe Southern drought forced ranchers to sell stock quickly.
Live cattle prices are likely to fall in upcoming weeks, extending a 15% slide since they hit a record in early April.
That could in turn help cool world food prices that are hovering near record highs, stoking concerns about accelerating inflation and unrest in poorer countries.
The increase in cattle has been widely attributed to droughts in Texas, Oklahoma and Mexico that forced cattle off of pastures and into feedlots. That should mean ample cattle for beef packers like Tyson Foods, Inc., JBS SA, and Cargill, Inc.
"We just confirmed that we will have big numbers ahead and that is good for the packing plants," says Don Roose, analyst at U.S. Commodities Inc. "We have more beef and pork in storage than a year ago and we have more beef coming at us."
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