Cattle futures are forecast to surge 20 percent next year and notch a record price after nourishing rains did their part to encourage feeding animals rather than slaughtering them, according to Bloomberg.
The rains benefited grazing fields and corn crops to the delight of ranchers from Texas to Nebraska. But reduced processing is forecast to pull down production as much as 6 percent next year in the world's largest-producing nation. As of July 1, cattle herd figures in the U.S. fell to their lowest since 1973 due to drought conditions impacting expenses of food.
"Lower grain prices mean ranchers will be able to retain cattle for a longer period, reducing the availability of animals for slaughtering," chief executive officer Wesley Batista with a family abattoir in Western Brazil told the news source. "We believe prices will keep going higher."
At 10:42 a.m. on Wednesday, cattle futures fell 0.23 percent, a 0.003 cent loss to $1.2985 per pound.
Traders and analysts said they were patiently waiting on the release of this week's report for cash cattle sales, according to Reuters.
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