Beef prices soar as cattle herds dwindle

Grocery stores and fast-food chains worry that costs will keep climbing.

By Kim Peterson Jun 13, 2012 1:52PM
Image: Packaged ground beef (© Frank Bean/Uppercut RF/Getty Images)Mealtime choices are changing across America, a country that has raised generations on red meat and potatoes.

The beef is disappearing.

Americans are eating less beef, and the size of the cattle herd has fallen to its smallest since 1952. Beef prices are rising, and fast-food chains and other companies are worried about increasing materials costs.

Beef consumption has fallen for six years straight, Bloomberg reports. There are a number of reasons, including the "pink slime" controversy over treated meat. Americans are also more concerned about their health. And beef has become very expensive -- ground beef hit an average of $3.02 a pound in March, the highest since 1984.

The Livestock Marketing Information Center predicts record beef prices this year, Bloomberg reports. We could see those higher costs at stores and at restaurants.

The main reason beef prices are climbing is that there are fewer cows -- only 90.77 million head at the beginning of this year, a decline of 2.1% from the year before, Bloomberg reports. Drought across America has forced farmers to keep herds low.

Don't expect many changes, either. The U.S. Department of Agriculture forecasts beef stocks to decline further in 2013, though beef imports may rise slightly to help meet the shortage.

These higher prices are weighing heavily on the minds of executives at fast-food companies and grocery stores. Costco (COST) said it's dealing with rising beef prices this year, Bloomberg reports. Wendy's (WEN) and McDonald's (MCD) are feeling the pain as well.

The result? America will continue to move away from beef to pork, chicken and other options. Prices are simply getting too high. A juicy steak will become an indulgence, a treat that we can't afford too often. Tofu, anyone?

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701Comments
Jun 13, 2012 3:48PM
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Its not just beef . In general food is going up , way up . Many prices for many items appear to stay the same but the amounts you get for your money go down . I guess no one is supposed to see that .
Jun 13, 2012 5:18PM
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The ignorance about the food supply that is shown in the posts here is stunning. The problem with the beef supply has nothing to do with Obama, big corporations or the EPA. The problem comes from the last couple of years' drought in Texas, Oklahoma and parts of Kansas, a problem that is going to affect Colorado and some of the other beef-producing western states this year. Last year was so bad in the south that hay (winter feed for cattle) quadrupled in price in some places and there was no pasture, so many producers were forced to liquidate their herds or let them starve to death. This not only affects the current supply, but has a knock-on affect for years to come, as it takes time to re-build herds - cows only have 1 calf per year, so it takes a number of years to replace lost cows.

I wish more people would become truely educated on where their food comes from, beyond the grocery store, and realise that most people involved in feeding this country, and the rest of the world, are hard-working, God-fearing folk who are at the mercy of the weather, the economy and many other factors beyond their control. You should be thanking them for the food they put on your tables...

Jun 13, 2012 3:47PM
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so sick of vegetarians telling people who eat meat what they need to do. I don't tell you how to eat plants so don't tell me how to eat meat. Our country is going in the opposite direction we need to be going. We are fighting against things that are making our Meat Cheaper while making it safer to eat. Maybe we should be focusing on the things that are hurting us as a country like why people are Eating Each other...Pinkslime was a harmless product that a got a bad rap from some idiots, and now we have people going after Farmers for raising their animals wrong? Unless you are a farmer and know anything about the subject to be giving input stay out of it.... or at least do some research first!
Jun 13, 2012 3:20PM
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Demand is down, price goes up!! Sounds like oil.
Makes total sense. If demand is down, and herd sizes are down, shouldn't the price stay the same?
There's always a foggy explanation as to why the consumer gets the shaft, let's hear it.

Jun 13, 2012 3:42PM
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Who the hell are they BSing about a shortage of cattle.  We are shipping them as fast as we can overseas to Korea, Japan, China and whoever else wants it.  Just another damn excuse to gouge the consumer.  If everyone else is like me, they can shove it up their a$$.  Consumer pricing has gone up almost 40% in the past 3 years. Mine and Im sure many of you alls pay has only gone up 2% in the past 6 years. So thats a 38% increase over my salary.   Who is suppose to able to afford beef?  The rich only?  US, you have broken the backs of the working poor class that pays the taxes and keeps the economy going.  We are going broke.  If we are broke, the economy is done.
Jun 13, 2012 3:54PM
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Lots of clueless people.

Beef in this country eat corn.  Animal feed USED to be the number 1 use of corn (and a top use of soy and several other feeds) in the U.S.

Bush's promise in his 2006 State of the Union (and Obama's continuation) of a quest for 30 billion gallons of biofuels a year has caused a near doubling in the demand of corn, resulting in a doubling in the cost of corn, resulting in a doubling of the cost of beef.

Get it?

Get off ethanol - meat becomes cheaper.

Jun 13, 2012 3:32PM
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I love how these reporters like making manic statements trying to get a rise out of people! Don't worry folks, what the writer forgets to tell you is that the reduction in herds was matched with the reduction in consumption which plainly states absolutely nothing has changed and prices will drop and level out due to supply and demand.  Lets put this into perspective... if you cut back on 5% of your beef purchases that would roughly equate as follows: IF the average person ate 5 pounds of beef a week , a 5% reduction = .25  ..  1 burger a week less folks .. and the actual reduction is 2.1% or less than half a burger patty if you eat 5 pounds of beef a week!  Enjoy your normal American barbeques and ignore lunatic comments from the press...
Jun 13, 2012 4:00PM
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To (Jack Kelly)- With all due respect, my family does raise both beef and hay on a full scale farm in the midwest.  Last summer we had a devastating hay crop (what the cattle eat all winter), the pastures dried up and were picked nearly barren, and most of the ponds and seasonal creeks and streams dried up.  Our operation fared okay, but every week the livestock auctions were packed full of cattle being sold by farmers who were out of either A. water, B. feed, C. money, or D. all of the above.  The buyers for nearly all of those cattle were the feed lots and slaughter houses.  Many of the cows sent to market were healthy females who SHOULD have had many more years of cranking out tasty babies before they were retired to the hamburger stand, but it didn't work that way.  They went to market, were killed and consumed.  Now that we have had just a little rain, farmers are trying to recover....which means they are keeping all of their heifer calves to replenish what they sold.  That means that this year, they will sell roughly half as many calves at auction (only the steer calves, if they keep their heifers), AND it will take two years of feeding and caring for those babies before they drop their first calf....and about another year before he is edible.  I am sorry, but no one is trying to gouge anyone.
Jun 13, 2012 5:10PM
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I am a cattleman. I raise beef cattle and sell at market . The main reason for the price of beef going up is Obama's "green inititive.". Corn is the main ingredient in most stck feeds and it has gone up as a direct result of the government subsidizing gasoline companies that use the 10% alcohol in their fuel. It costs you at the pump in lower gas milage, it costs you in taxes paid for the subsidies, and it costs you in the grocery store.

  This is the truth. The price for me to raise the beef you buy has gone up, so you get to pay! This is another liberal action that hurts you directly!

Jun 13, 2012 3:45PM
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I'm a fourth generation cattle rancher. And I will admit that I am not certain how the future will be for us in the cattle industry. The fact is every input that is utilized in cattle production is touched by oil. Growing crops for feed, fertilizer for crops, harvesting of the crop, hauling the crop to market, manufacturing the crop to a feed, and then hauling the finished feed to the producer. Until, the price of oil drops to a reasonable price $50-$65\barrel, beef prices will always remain high. The dwindling national herd size is a scape goat of people not wanting to call out the price of oil. The national cattle herd has been decreasing since the laste 150's.
Jun 13, 2012 6:45PM
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beef is going up, so is everything else at grocery stores. even non-food items are skyrocketing. have you purchased paper goods lately? paper plates, napkins paper towels etc are ridiculus. charcoal for grilling has pretty much doubled in price. cleaning products out of sight.

this is just plain old inflation hitting because this administration is printing funny money. you ain't seen nothing yet!!

Jun 13, 2012 5:18PM
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We have our own farm and (very) small herd of both beef and dairy cattle. Maybe we'll actually stop hemorrhaging cash and be able to break even this year!

 

Of course, it's also nice to be able to slaughter your own pastured, grass-fed bull every year and not have to eat that swill most people call beef, raised in feed lots and shot full of anitbiotics, hormones, and who knows what else. I wonder how many people have truly eaten real beef (or chicken, or pork)?

Jun 13, 2012 5:13PM
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Thank you Al Gore for telling us how much we needed ethonol, diverting the corn production to it for years, then stating this year it was all a waste of time and money... and we should stop producing it. Now that there is less feed for cattle and we have higher prices. Funny how the media forgot to play up Al's statement, well, perhaps not so funny.
Jun 13, 2012 6:42PM
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Who needs backyards anymore? Get rid of the swimming pools, patios and parking lots. It may be time for every family in America to have a few chickens, a few producing cattle, some pigs, maybe goats, a good garden and some of the tools of yesteryear that allowed families to make sure they had food to eat.

I realize that this isn't possible in a lot of regions of this country, but maybe, just maybe we're on the verge of forming neighborhood cooperatives, members who invest in being part of small entrepreneurial start-up farms that provide a source of food for its members. We partner with small to medium sized family farms. Gives them a shot to survive the Corporate takeover and is a plus for the rest of us. Nothing against Corporations, just interested in surviving this century.

We're going back to tie the past into the future. Could be the only way we survive. Get the DeLoreans out and watch for lightning.

Jun 13, 2012 4:34PM
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I just recently watched a news report that ranchers are raking in high profits from cattle, mainly because it is all being exported to China and other Asian countries. Prices are being inflated not because of lower consumption but because of the exports. So lets just rake the American people over the coals in the name of bigger profits and increase the poverty level right here at home.
Jun 13, 2012 5:10PM
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And ...chicken sales go up.

 

Why is a pound of bacon $5.30 is what I wanna know?  Is there a pig shortage?

Jun 13, 2012 4:00PM
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You got to ask yourself.....are you better off than you were 4 years ago? The same question we ask every general election.

 

We've hade nothing but a long line of bad Presidents, both republican & democrats.

 

We keep electing the same old duds to congress.

 

When will the American voter wake up?

Jun 13, 2012 4:59PM
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Glad i live in Iowa and get the finest beef and pork in the country. You people don't know what your missing!
Jun 13, 2012 3:39PM
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All the more reason to buy from your local cattleman. Know where your food comes from! I know our beef is born and raised in the same county we live in by a family who loves their animals like their family. It's processed at a state inspected facility and cut how I want it. There's no "pink slime" and the ground beef doesn't look like worms. Most of the time, I have to add water to get the hamburger to cook right because it's so lean. Educate yourselves and buy local.
Jun 13, 2012 4:34PM
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Beef stocks decline so we have to import. This the same crap we heard about oil. We exported almost 3 BILLION pounds of beef in 2011. What a rip.
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