The months of no rain in Texas and Oklahoma have sent record numbers of cattle to the processors. There is just no grass out there for the cows to eat. What about hay you ask, well hay is just tall grass so quit asking. You would think this would bring prices down but the brains who trade in beef have found a way to firm the market instead.
Imports of Beef and Veal are down 13% and here is the kicker, Exports are up 30% over last year. The weak US dollar is making it more profitable to send our beef over seas than to sell it domestic. Price increases in economy cuts are spiking first. Consumers are opting for more economical cuts as our pocket books tighten, they are looking to flank, chuck, rounds and grinds. As more US beef goes overseas Lipons, Strips and Tenders will follow. So what is a steak house to do. Take a position! Buy forward! I would rather have a frozen beef tender in my cooler at $9 per # than a $12 one.
