US cattle feedyards face a weekly loss of $110 million
Recession reduces demand for steak as consumers switch to hamburgers.
Cattle feedyards in the U.S. are suffering losses because the recession is forcing Americans to choose hamburgers over steaks, The Vancouver Sun reported. Economists predict that many feedyards will continue to close or downsize.
Jim Robb, an economist at the Livestock Marketing Information Center, was quoted as saying that recovery from the huge losses during the first three months of 2009 will take a very long time.
The president of AzTx Cattle Co., John Josserand, said that even promotional offers in restaurants and supermarkets across the country have not been able to sufficiently increase demand for the more expensive cuts of beef from grain-fed cattle.
Feedyards are incurring a $200 loss on every head of cattle sold. Industry-wide losses are estimated to be $110 million a week.
USDA data show that closures and the shrinking of feedyards has resulted in the lowest supply of cattle in U.S. in the last five years as of February 1.