Wednesday, July 11, 2012
What's Causing Rising Beef Prices?
What’s causing Rising Beef Prices?
The price of beef has hit an all-time high and experts expect prices to rise even more throughout 2012 and possibly beyond. Multiple factors have influenced the rise in beef prices:
v Last Summer’s Drought in Texas & Oklahoma:
~Almost a quarter of American cattle are raised in these states and the drought provided little pasture for cattle to graze and caused 4 million acres to be burnt in wildfires
~Farmers were forced to sell, not only their feeder cattle, but also the mamas to make ends meet. Selling moms means no young cattle to raise
~U.S. Beef exports are high and recovering the beef supply is not a quick fix due to gestation and time to grow; so supply will be lower for at least 18-24 months
v Supply is low and demand is high!
~This textbook economic situation means prices rise~
v Corn is High:
~Market cattle eat corn which helps create internal marbling for higher USDA grades.
~Corn prices have lowered slightly, but are still high because of demand for not only food but ethanol.
~Bottom line, it costs more to raise the cattle and costs are passed on to the consumers.
Poole’s Meat Market will continue to sell the highest quality we can get our hands on, Chairman’s Reserve, and offer Bundle Meat Packages to stock your freezer. Ask for a brochure today!