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Cattle Prices Veering Into "Uncharted Waters"

Cattle prices are approaching record levels in several markets at the end of 2010 and are likely to take producers, packers and the rest of the cattle industry into uncharted waters in the coming year.

Cattle prices are approaching record levels in several markets at the end of 2010 and are likely to take producers, packers and the rest of the cattle industry into uncharted waters in the coming year.

Analysts generally believe five market factors are expected to have the biggest impact.

First, beef demand. Projected decreases in beef production in 2011 will almost certainly pressure wholesale and retail beef prices higher.

“The ability to pass on the impacts of reduced beef supplies will depend on continued recovery in beef demand,” says Derrell Peel, Oklahoma State University Cooperative Extension livestock marketing specialist. “Recessionary weakness continues to limit middle meat demand, though signs of recovery are evident at the end of 2010.”

The news is not all bad for consumers, though. Increased competing meat supplies, mostly increased poultry production, are in a position to potentially temper retail beef prices somewhat.

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