"There have been some rather dramatic changes in our herd," said Dr Calkins. "The size of the US cow herd is low and continuing to fall - the cattle inventory is now at the same stage it was at in the 1960's."

There has been an increasing amount of heifers entering the feedlots, which has obviously had an effect on the US breeding herd.

Slaughter has also fallen since 2006, which has meant that US commercial beef production is falling. On top of this domestic beef demand is also dropping.

However, despite this negative news, there is some light at the end of the tunnel. Beef exports are strong and increasing, he said, stressing that the US very much values its export partners, including the EU.

Eoin Treacy's view Higher grain and bean prices translate into a higher cost of production for beef, hogs and chicken. Producers often experience difficulty in passing on costs, causing marginal producers to sell their breeding stock and exit at least part of the business. This in turn leads to less supply which eventually pushes prices up.

Feeder cattle rallied impressively in the first quarter to test the upper side of the 6-year range. Longer-term, this range has the appearance of a first step above an even lengthier base dating from 1979. A sustained move above $120 would reassert medium-term demand dominance.

Live cattle has posted a progression of higher reaction lows since mid 2009 and while becoming increasing overextended relative to the 200-day MA as it approaches the 2008 peak, a sustained move below $95 would be required to question medum-term upside potential.