Changing markets, other factors driving beef prices up
ST. LOUIS — For anyone who loves a good steak, a juicy burger or a nice Sunday roast, these are anxious times.
Prices for beef, which have been climbing for months, hit a record high in December — an average of $5 a pound — and analysts predict they could climb 5 to 8 percent higher this year.
“Prices have gone up quite a bit. That usually happens around the holidays, but we expect them to come down,” said Pam Neal, owner of the steak-centric Al’s Restaurant in St. Louis. “Not this time. They’re going to be jumping even higher. It’s hard to handle.”
Beef prices are soaring for a number of reasons. Producers, who struggled with high feed costs and diminishing profits, began shrinking their herds roughly five years ago. Since then, demand from overseas markets has shot up — a record 11 percent of American beef went overseas last year, up from 8.7 percent in 2010.
In July of last year, the U.S. beef herd had dropped to its lowest point since 1958. Also last year, a drought in Texas and Oklahoma, the top two cattle-producing states, forced producers to cull herds. As a result, the number of cattle in the United States fell 2 percent from the beginning of 2011 to 90.8 million head, the United States Department of Agriculture reported last week.
“There’s not enough beef out there,” said Ron Plain, an agricultural economist with the University of Missouri. “This year, there’s going to be less beef, more people, the supply is going to be tighter, and that means more records.”
Compounding matters for beef lovers are soaring feed, fuel and production costs, which are forcing price increases all along the production chain.
“Look at our fertilizer costs, our grain costs. Any piece of machinery we buy has just gone up,” said Tom Sachs, who raises cattle in Missouri’s St. Charles County. “Our input costs are just really high.” For the cattle industry in general, the numbers come as good news. Prices, per pound for a steer, have topped $1.70 of late, compared with about 95 cents five years ago. For the average 1,300-pound steer, that adds up.
But the good times for the industry have not come without some trials, and some work in courting overseas markets.
Since 1980, according to the U.S. Department of Agriculture, per capita beef consumption has plummeted 25 percent. In 2011, the average American consumed 57.6 pounds of beef, down 13 percent from a decade prior.
This year the number is predicted to decline again to 54.1 pounds.
The reasons for the decline are difficult to isolate. But they include health concerns over the higher fat content in red meat, worries about humane treatment and links to environmental problems, including greenhouse gases — all of which have gotten a lot of attention in recent years.
Some people point to public health campaigns, such as “Meatless Mondays,” launched by the Johns Hopkins University’s Bloomberg School of Public Health, for the shrinking numbers. The industry insists the American appetite for beef is still strong, while some analysts and researchers suggest the decline, at least in recent years, is simply because of the recession.
“These noneconomic factors are really tough to talk about,” said Scott Brown, a livestock economist with the Food and Agricultural Policy Research Center at the University of Missouri. “Frankly, when the consumer goes to the store or restaurant, it’s the relative price that’s driving their decision.”
Whatever the reason for the decline, the country’s cattle producers have helped compensate for it by making inroads into overseas markets, particularly in Asia.
“Worldwide consumption of meat and demand has increased,” said Jeff Windett, who heads the Missouri Cattlemen’s Association. “I think it’s just good business sense to expand market opportunities for producers.” “It spells a very bright spot for the U.S. beef industry,” Brown said. “There are just a lot of things on the trade front that look to be very positive.” ON THE RISE Prices for beef overall hit a record high in December. Even prices for economical ground chuck have climbed in the past five years. Average price per pound of ground chuck in December: 2007: $2.70 2008: $3.00 2009: $2.83 2010: $2.93 2011: $3.27 Source: USDA
Feb 10, 2012 at 12:49 p.m.
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li713, would you like fries or chips with that tofuburger?
Feb 10, 2012 at 12:08 p.m.
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Think food costs are high now? Just wait until the government raises the minimum ethanol requirements in fuel. Lobbyists for the corn growers associations are trying to get it raised to 15% as week speak, if not higher. Never mind how corrosive it is on all our fueling infrastructure from the pipelines, to the tanker trucks, to the holding tanks, to the lines and gas pumps, and eventually your vehicle. You think gas prices are high now? Wait until all of those systems have to be replaced in half the time of their estimated life span and see where that costs get placed. I know what those costs are and I saw some horrifying pictures of the corrosion at a Wisconsin Department of Commerce training session. The reality of ethanol hasn't even been realized yet, but they're going to keep forcing it down our throats anyway. Not to mention the fact that they did not extend the tax cut on ethanol fuels after December 31st, 2011, so the taxes are no longer any cheaper than conventional fuel. That did not help the prices at the pump.
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The day it costs me $20 to get a cheeseburger in Wisconsin is officially the end of the world.
Feb 10, 2012 at 10:02 a.m.
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MooShoo - HAHAHAHA!!!! Thanks for the morning giggle!!! Sounds yummy!
Feb 10, 2012 at 8:34 a.m.
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dukes i forgot about the 10% and imagine w/o that you get BETTER fuel econ. Used to fill up at Arnts in Milton - no ethenol and the price wasn't about 10 cents more. Anyother place is was more than 30 cents more and again the math didn't work out that way.
Feb 10, 2012 at 8:29 a.m.
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Midnight_Ride
Feb 9, 2012 at 7:39 p.m.
On average how much do welfare recipients receive?
When you add the medicaid, housing, food, and monthly stipend it equals about $43,000 per year tax free. So add tax it works out to $55,000
Democrats as far back as Wilson have been putting voters on the gravy train and America is now worse then it ever was. 1 in 5 collect some sort of government handout. How is that liberalism helping you/or maybe they like being spoon feed by the government- keep them down, keep them uneducated, and keep them wanting more. PLANTATION POLITITICS
If you were educated, you'd grasp the slavery aspect of what liberalism is. Why do Democrats at every turn in Congress reject having the welfare recipient go to school of higher learning as a means to obtain support?
Feb 10, 2012 at 7:19 a.m.
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poobah, you are banking that Romney will be the GOP candidate. I'm sure Mr. Obama and the media would love that, but the heartland is pushing back and in the lastest Rasmussen poll, even Santorum is ahead of Obama.
America is asking him, where's the beef?
Feb 10, 2012 at 5:07 a.m.
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poobah-Tofu is the new porterhouse without the bone. Tofu can only be converted into grease for windmills so it has no other future.
Feb 9, 2012 at 11:14 p.m.
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mmmm, the other red meat... MooShoo squirrel.
Feb 9, 2012 at 10:24 p.m.
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Soylent Green is people!
Feb 9, 2012 at 9:33 p.m.
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Midnight , sounds like you and Rush are on the same drugs.
http://politicalhumor.about.com/od/rushl...
Feb 9, 2012 at 9:32 p.m.
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ethanol is the heart healthy fuel. In a round about way that is.
Feb 9, 2012 at 8:50 p.m.
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I wouldn't take that bet, Midnight_Ride. Obama's team successfully sucked the media into this contraceptive issue. They did it to set up Romney and it worked beautifully. Look for Democrats talking about nothing except the Massachusetts contraceptive program under Romney that is nearly identical to the recently announced federal program. The message is that this Mormon liberal Republican from Massachusetts imposed the same "mandate" on conservative Catholics in Massachusetts. And now Obama will back off slightly with waivers for religious organizations, but poor old Mitt is stuck with his record. Brilliant move by the Obama strategists.
Feb 9, 2012 at 8:42 p.m.
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Poor Richard said, "Until supplies are up anyone making over $200,000 yearly will be prohibited from buying beef and will have to substitute pig meat."
Haha, pig meat. How about tofu, Richard? Pretty soon they'll be turning soybeans into fuel and tofu will be priced out of the food market too. Please, nobody tell me they already have.
Feb 9, 2012 at 8:32 p.m.
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""
So glad it's an election year for this one term President.
""
hey midnite wanna bet?
Feb 9, 2012 at 8:31 p.m.
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Yeah that terrible green energy. I do know that if the planet burns 4 billion barrels of oil a year , and burning 6 billion tons of coal. they are obviously UNLIMITED energy sources and will NEVER run out. Plus burning all of that carbon based fuel over the span of 2-3 generations, will never have a detrimental effect on the atmosphere, so just keep on burnin it, BRILLIANT!!
Feb 9, 2012 at 7:50 p.m.
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I think I will invest in my cousins beef farm ! Steers mean big bucks, not like in the movies if you know what I mean. He is even shocked about the prices,with a herd of 2000,I think he will do well in the coming months,I wonder if that is why he sold the dairy farm ? And they call farmers dum !
Feb 9, 2012 at 7:42 p.m.
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And where's the incentive to work? Not there either. Just happy to go get their free beef.
Feb 9, 2012 at 7:39 p.m.
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On average how much do welfare recipients receive?
When you add the medicaid, housing, food, and monthly stipend it equals about $43,000 per year tax free. So add tax it works out to $55,000. That includes free beef.
--The average household income in the US is $52,000.00 for a worker. We still have to pay for our beef.
--Like Rush pointed out today, how many of those $55,000.00 per year vote Democrat?
Let's not forget the free cell phones.
--$52,000.00 per year paying for the $55,000.00 per year. How is that sustainable?
Answer from Greece, it's not.
Feb 9, 2012 at 7:27 p.m.
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How did we get on ethanol? Oh right, 1st, and 2nd comments.
Good news?
Congress Ends Era Of Ethanol Subsidies
http://www.npr.org/2012/01/03/144605485/...
More good news?
US Opens Market for Brazilian Ethanol
http://riotimesonline.com/brazil-news/ri...
I'm just web surfin'...
Feb 9, 2012 at 7:11 p.m.
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It's Bush's fault-The wars in Iraq and Afghanistan used up the beef supplies we had and put us back at least two decades. Fortunately Obama has enough bull to quickly close the gap and prices should start falling soon. Until supplies are up anyone making over $200,000 yearly will be prohibited from buying beef and will have to substitute pig meat.
Feb 9, 2012 at 7:08 p.m.
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Ethanol is just another green energy scam and unfortunatly it does cause a big increase in corn prices. If it wasn't subsidised no one would produce it.
Feb 9, 2012 at 7:03 p.m.
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yes, almost every gas station has 10% ethanol in their fuel. If you search, you can find a select few offering non-ethanol blends. Imagine almost 10% of our fuel consumed coming from corn...
Feb 9, 2012 at 6:57 p.m.
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frogger: there's ethanol in every pump. It's labelled on the pump. And ethanol from Brazil is cheaper iirc, but I forget why it's blocked from inportation.
Feb 9, 2012 at 6:46 p.m.
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I odn't know of anybody putting e-85 in their tank. Fuel econ stinks and it isn't much cheaper. The math doens't work out to use the stuff in your car.
Feb 9, 2012 at 6:15 p.m.
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High feed corn prices, because of corn ethanol, are driving up most food prices.
Feb 9, 2012 at 6:06 p.m.
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And Gas Prices - So glad it's an election year for this one term President.
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