A "lethargic world economy" will send global beef prices soaring in 2013, according to Rabobank. Droughts in the U.S. Midwest slowed beef production in 2012, and the slow-down is expected to continue into the new year—drought or not—by as much as 9%.
Expectations are that the area will experience "severe to exceptional drought conditions." If that comes to pass, ranchers will likely send heifers to market sooner.
Should the rains come, however, ranchers will instead keep the heifers home for breeding, instead of sending them to market, according to David Nelson, a Rabobank analyst.
Rabobank also notes that, in October, the price for a pound of lean ground beef averaged $4.11, up 30 cents from a year earlier, according to the Bureau of Labor Statistics.
Further, demand for beef is expected to fall in the United States next year, as well. Americans are predicted to eat around 55 pounds of beef per person in 2013, down from about 58 pounds this year, according to USDA estimates.
