Price of beef about to skyrocket

Image via WikipediaThe U.S. cattle herd is the smallest in 50 years and is expected to get even smaller as near record high prices for steers and heifers have ranchers selling off their breeding stock rather than rebuilding herds.

Cattle traded this week at $108 per 100 lbs, the highest in seven years, and some analysts predict record highs of $120 or more later this year.

While the cattle herd and beef production shrink, demand is on the rise.

Foreign countries are buying more U.S. beef because of improving economies there and because of production problems in their traditional suppliers, such as flood-ravaged Australia.

U.S. beef exports in 2010 through November are up 25 percent from a year earlier.

"The largest beef supplier is the United States right now," said Eric Ocrant, vice president of Chicago-based Oak Investment Group.

China, a country with 1.3 billion people, is expected to start buying U.S. beef after a seven-year absence due in part to flooding in Australia reducing beef exports. Read more...