Gulf Oil Spill May Bring Higher Beef Prices
Analysts agree it's too soon to know how deep the losses will be on the seafood industry form the Gulf oil spill. But it will be deep for the shrimpers, consumers and it may even impact the red meat markets as well.
"It could mean higher shrimp and seafood prices. Supply will be down. Sure, we can import from Asia and other places, but there's a transportation cost associated with that,” figures Jim Bower of Bower Trading. His action:
"I bought feeder cattle today at $107.80. They are off 1000 points from their high in about the past month, and I think consumer response to more costly shrimp for special meals—and seeking food they consider safe--will be to turn to beef.”
His caveat: If the economy continues to be so uncertain, demand for premium dinners of any kind could be dampened.David Maloni, market analyst for the American Restaurant Association and principal of ARA Trading, counters: "It's a little too early to tell, but my current reaction is that the impact on other meats will be minimal.
"Roughly 90% of the shrimp consumed in the U.S. is imported and a large portion of the remaining 10% comes from other areas of the Gulf of Mexico that have yet to be affected by the spill. Additionally, a rising dollar is bullish for shrimp imports. So I don't see a lot of substitution from other meats, especially given the existing elevated price levels and economic uncertainties.”
