A prolonged drought from Kansas to Texas probably forced U.S. ranchers to sell more cattle to feedlots last month, signaling increased supplies for meat processors including Tyson Foods, Inc. and lower beef prices.


Deteriorating pasture conditions in the southern Great Plains and record cattle prices prompted the sale of 1.935 million head to feedlot operators, up 4.2% from March 2010, according to a Bloomberg survey of 14 analysts.


As the animals near their slaughter weights in the next three or four months, retail-beef prices may slip from all-time highs and cattle futures may drop 14% from a record $1.21/lb. reached April 4, says Troy Vetterkind, the owner of Vetterkind Cattle Brokerage. More cattle will reduce costs for processors, including Tyson and JBS SA, and wholesale meat buyers such as Morton's Restaurant Group Inc. (MRT).


“There’s just going to be ample numbers of cattle come to slaughter later on this summer,” Vetterkind says. “You’ll probably see beef prices start to trend lower into July and August.”


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