gotbeer
Fri, Oct-03-03, 12:29
Friday Edition: Soaring Beef Prices
By Al Tompkins
link to article (http://www.poynter.org/column.asp?id=2&aid=49997)
Here is a story with all the goodies — consumer angles, health angles, agriculture and farm angles, crime angles, Atkins Diet, trade policy, etc.
Reuters said:
Feedlots in the heart of U.S. cattle country -- Texas, Oklahoma, Kansas, and Nebraska — reported that packers Tuesday paid as much as $90 per hundred pounds for cattle, $3 to $4 higher than a week ago. That smashed previous records by at least $2 to $3, cattle traders and market analysts said. They also predicted more new records.
At the current high prices, some estimates are that farmers can see a $200 profit on every animal they sell. You can see daily cattle prices from 40 cities on the USDA site.
Stay on top of farming news by reading Agriculture.com — run by Successful Farming magazine.
AP said:
Cattle prices are soaring to levels not seen in at least a decade after herds were trimmed due to drought, demand grew and a mad cow disease outbreak in Canada combined to mean more bucks for the beef. …
Ernie Davis, a livestock marketing economist with the Texas Cooperative Extension, said cattle ranchers who endured years of drought are "making money right now."
"We've worked our way into one of the best markets that I've seen in my 40 years of livestock marketing," Davis said. Last week, slaughter steers averaged $84.94, 33 percent higher than 2002. The highest price on record, according to Texas A&M University, is $85.38 during the week of March 27, 1993.
Reuters said:
"If the beef market continues to trend higher with this phenomenal demand, we will see cattle prices go higher," said Travis Benson, analyst at Denver-based Crystal River Capital. Analysts said the run to record cattle prices can be traced back to a year ago, when low cattle prices and a glut of beef, pork, and chicken, stemming in part from a trade dispute with Russia, had producers losing up to $100 on each head of cattle raised.
As a result, cattle ranchers cut herds sharply. It is that reduced supply that beef packers are now fighting over. The record rise was triggered in May, when the United States — and soon after, many other countries — banned imports of both cattle and beef from Canada after a single case of deadly mad cow disease (search) was discovered in Alberta.
* * *
Consumer Level Effect
The higher prices are showing up at the grocery — but retailers are absorbing some of it. The Oregonian reported:
Tim Larson, co-owner of Butcher Block Meats in Oregon City, said wholesale beef prices continue to increase. One supplier raised the price of boxed beef by 30 cents to 40 cents a pound last week, Larson said.
"I try to not pass on all of the increases to my customers," he said. "You don't want to raise it so much. I think that's what a lot of other retailers are doing." The result is a lower profit margin at the retail level, he said. He's increased the prices of porterhouse steak by $1 a pound, to $6.99, compared with a year ago and for lean ground beef by 31 cents a pound, to $2.29.
Restaurants Shocked by Hikes
Restaurants, especially steak houses, are feeling the increase. The Financial News and Daily Record in Jacksonville, Fla., reported:
Ruth's Chris Steakhouse General Manager Chad Cancelosi described this year's price climb as steeper than past years. Although prices usually rise during dry summer and winter months, Cancelosi said this year's prices exceeded the normal seasonal market rates by 30 cents to a dollar.
"These prices are at the highest level I've seen in six years," said Cancelosi. "Our profit margin is always less in the summer, but these prices are higher than I've seen."
Atkins Popularity
One story also said that meat demand is high, in small part because of popular diets like Atkins. Of course the recent increases make Atkins a lot more expensive to follow. The Kansas City Star reported:
There's no definitive proof that the high-protein, low-carbohydrate diet is the big driver. But mounting statistical and anecdotal evidence suggests the diet is contributing to a fundamental market shift. After a two-decade decline in per capita consumption of choice beef, an upturn started in late 1998 and generally has continued into 2003, said James Mintert, Kansas State University professor of agricultural economics.
"You can speculate on how much of it is attributable to Atkins," Mintert said. "But I do think there's been some kind of underlying shift among consumers about beef versus some other products they consume, a recognition on their part that it's OK to eat beef."
back to top
Cattle Rustling
When cattle prices go up, there is always a concern that thieves will move in.
The Miller (S.D.) Press says, "a September 5 article in the Minneapolis Star Tribune states that cattle theft in South Dakota increased 300 percent from 2001 to 2002, according to the South Dakota State Brand Board."
How do rustlers work these days? Here is a story that is several years old, but it gives you an idea about how sophisticated rustlers can be.
By the Numbers
The Topeka Capital-Journal listed these stats from the National Agricultural Statistics Service, run by the USDA:
In August, U.S. inventory of cattle and calves on feed was down 5 percent from a year ago and 12 percent below two years ago. The top states with cattle and calves on feed, which are animals being fed a ration of grain and/or other concentrates that are expected to produce a carcass that will grade select or better, are:
· Texas: 2.8 million head
· Kansas: 2.1 million head
· Nebraska: 1.7 million head
· Colorado: 890,000 head
By Al Tompkins
link to article (http://www.poynter.org/column.asp?id=2&aid=49997)
Here is a story with all the goodies — consumer angles, health angles, agriculture and farm angles, crime angles, Atkins Diet, trade policy, etc.
Reuters said:
Feedlots in the heart of U.S. cattle country -- Texas, Oklahoma, Kansas, and Nebraska — reported that packers Tuesday paid as much as $90 per hundred pounds for cattle, $3 to $4 higher than a week ago. That smashed previous records by at least $2 to $3, cattle traders and market analysts said. They also predicted more new records.
At the current high prices, some estimates are that farmers can see a $200 profit on every animal they sell. You can see daily cattle prices from 40 cities on the USDA site.
Stay on top of farming news by reading Agriculture.com — run by Successful Farming magazine.
AP said:
Cattle prices are soaring to levels not seen in at least a decade after herds were trimmed due to drought, demand grew and a mad cow disease outbreak in Canada combined to mean more bucks for the beef. …
Ernie Davis, a livestock marketing economist with the Texas Cooperative Extension, said cattle ranchers who endured years of drought are "making money right now."
"We've worked our way into one of the best markets that I've seen in my 40 years of livestock marketing," Davis said. Last week, slaughter steers averaged $84.94, 33 percent higher than 2002. The highest price on record, according to Texas A&M University, is $85.38 during the week of March 27, 1993.
Reuters said:
"If the beef market continues to trend higher with this phenomenal demand, we will see cattle prices go higher," said Travis Benson, analyst at Denver-based Crystal River Capital. Analysts said the run to record cattle prices can be traced back to a year ago, when low cattle prices and a glut of beef, pork, and chicken, stemming in part from a trade dispute with Russia, had producers losing up to $100 on each head of cattle raised.
As a result, cattle ranchers cut herds sharply. It is that reduced supply that beef packers are now fighting over. The record rise was triggered in May, when the United States — and soon after, many other countries — banned imports of both cattle and beef from Canada after a single case of deadly mad cow disease (search) was discovered in Alberta.
* * *
Consumer Level Effect
The higher prices are showing up at the grocery — but retailers are absorbing some of it. The Oregonian reported:
Tim Larson, co-owner of Butcher Block Meats in Oregon City, said wholesale beef prices continue to increase. One supplier raised the price of boxed beef by 30 cents to 40 cents a pound last week, Larson said.
"I try to not pass on all of the increases to my customers," he said. "You don't want to raise it so much. I think that's what a lot of other retailers are doing." The result is a lower profit margin at the retail level, he said. He's increased the prices of porterhouse steak by $1 a pound, to $6.99, compared with a year ago and for lean ground beef by 31 cents a pound, to $2.29.
Restaurants Shocked by Hikes
Restaurants, especially steak houses, are feeling the increase. The Financial News and Daily Record in Jacksonville, Fla., reported:
Ruth's Chris Steakhouse General Manager Chad Cancelosi described this year's price climb as steeper than past years. Although prices usually rise during dry summer and winter months, Cancelosi said this year's prices exceeded the normal seasonal market rates by 30 cents to a dollar.
"These prices are at the highest level I've seen in six years," said Cancelosi. "Our profit margin is always less in the summer, but these prices are higher than I've seen."
Atkins Popularity
One story also said that meat demand is high, in small part because of popular diets like Atkins. Of course the recent increases make Atkins a lot more expensive to follow. The Kansas City Star reported:
There's no definitive proof that the high-protein, low-carbohydrate diet is the big driver. But mounting statistical and anecdotal evidence suggests the diet is contributing to a fundamental market shift. After a two-decade decline in per capita consumption of choice beef, an upturn started in late 1998 and generally has continued into 2003, said James Mintert, Kansas State University professor of agricultural economics.
"You can speculate on how much of it is attributable to Atkins," Mintert said. "But I do think there's been some kind of underlying shift among consumers about beef versus some other products they consume, a recognition on their part that it's OK to eat beef."
back to top
Cattle Rustling
When cattle prices go up, there is always a concern that thieves will move in.
The Miller (S.D.) Press says, "a September 5 article in the Minneapolis Star Tribune states that cattle theft in South Dakota increased 300 percent from 2001 to 2002, according to the South Dakota State Brand Board."
How do rustlers work these days? Here is a story that is several years old, but it gives you an idea about how sophisticated rustlers can be.
By the Numbers
The Topeka Capital-Journal listed these stats from the National Agricultural Statistics Service, run by the USDA:
In August, U.S. inventory of cattle and calves on feed was down 5 percent from a year ago and 12 percent below two years ago. The top states with cattle and calves on feed, which are animals being fed a ration of grain and/or other concentrates that are expected to produce a carcass that will grade select or better, are:
· Texas: 2.8 million head
· Kansas: 2.1 million head
· Nebraska: 1.7 million head
· Colorado: 890,000 head