(Updates with cattle futures in last paragraph.)
March 12 (Bloomberg) -- U.S. cattle prices will rebound to a record this year as a recovery in the world’s largest economy stokes demand for red meat, top beef producer JBS SA said.
The increase in consumption is coming at a time ranches in the U.S. still haven’t recuperated from a drought that reduced herds and led Cargill Inc. to shut a plant in January, JBS Chief Executive Officer Wesley Batista said yesterday in an interview at the headquarters of JBS’s parent J&F Participacoes SA in Sao Paulo. Cattle futures have dropped 4.9 percent in Chicago from a record $1.35175 a pound on Jan. 11 amid speculation that a rise in retail beef prices will boost demand for chicken meat and pork.
“This decline in prices will be short lived,” he said. “Global demand continues to rise and, as the U.S. economy slowly recovers, domestic demand will improve too.”
A surge in corn and soybean prices last year amid the worst U.S. drought in more than five decades prompted ranchers to cull animals at a record pace and led the U.S. cattle herd to drop to the lowest level since 1952.
The shutdown of Minneapolis-based Cargill’s plant in Texas, which represented about 3 percent of U.S. slaughtering capacity, will likely boost profits at rivals including JBS as they produce more to offset the shortfall, Batista said.
Cattle for April deliver rose 0.7 percent to $1.29 at 10:12 a.m. on the Chicago Mercantile Exchange.
--Editors: Carlos Caminada, Robin Saponar