The report reflects tightening supplies,'' said Chuck Levitt, a livestock analyst with Alaron Trading Corp. in Chicago. Although cattle prices are up 13 percent from a year ago, ''the report has to be considered supportive,'' he said. Cattle for February delivery rose as much as 0.85 cent, or 1.1 percent, to 78.05 cents a pound on the Chicago Mercantile Exchange, the highest price since March 1993. Ranchers in the seven biggest cattle-producing states sent 1.678 million young animals to feedlots in November, down 8 percent from the same month last year, the USDA said. Analysts surveyed by Bloomberg News expected a 7.4 percent decline.
Young cattle spend about four months on a feedlot before reaching slaughter weight.
The report signals a decline in beef supplies next year, along with higher prices. Wholesale beef prices already are hovering close to a record, Levitt said. Frigid winter weather in the Midwest is also boosting the price U.S. meatpackers are willing to pay cattle that are ready for slaughter, analysts said. The cold weather slows weight gain and forces feedlots to keep the animals longer before they're ready to sell to a slaughterhouse. Other grain and soybean prices also rose.