Tuesday, February 20, 2018
Business

Dwindling herds, overseas demand drives up beef prices

For anyone who loves a good steak, a juicy burger or a 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.

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 Agriculture Department 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. "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.

"Times are good," said Mike Miller of Cattlefax, a Colorado-based cattle industry research firm. "Our expectation is it's going to be good for some time."

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 Agriculture Department, 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 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."

That will, inevitably, put more pressure on prices in American supermarkets, at least in the short term. Because cattle herds take years to rebuild and require huge amounts of capital, it could be some time before the American cattle inventory can level costs to consumers, cattle ranchers say.

Comments
Career Q&A: Nut allergy is a serious workplace concern

Career Q&A: Nut allergy is a serious workplace concern

Q: My manager has recently started eating nuts at her desk, which is located right next to mine. Unfortunately, I have a serious nut allergy, so any contact with them could produce a life-threatening reaction. Even foods which contain tiny pieces of ...
Updated: 2 hours ago
Yes, we have some bananas: Port Tampa Bay welcomes first shipment in 21 years

Yes, we have some bananas: Port Tampa Bay welcomes first shipment in 21 years

TAMPA — More than two decades after the last bunch arrived on shore, bananas are back at Tampa’s port. More than 3,900 pallets of Chiquita bananas from Ecuador arrived last week at the new Port Logistics Refrigerated Services warehouse.It was the fir...
Updated: 5 hours ago
Guess co-founder steps aside after allegations from Kate Upton

Guess co-founder steps aside after allegations from Kate Upton

Associated PressNEW YORK — Guess Inc. says that co-founder Paul Marciano will give up his day-to-day responsibilities at the clothing company until a sexual misconduct investigation is completed. Model and actress Kate Upton told Time magazine earlie...
Updated: 9 hours ago
Grocery retailer Albertsons to buy drugstore chain Rite Aid

Grocery retailer Albertsons to buy drugstore chain Rite Aid

Associated PressThe privately held owner of Safeway, Vons and other grocery brands is plunging deeper into the pharmacy business with a deal to buy Rite Aid, the nation’s third-largest drugstore chain. Albertsons Companies is offering either a share ...
Published: 02/20/18
Following deaths from Irma, Florida looks to new rules for keeping nursing homes cool after outages

Following deaths from Irma, Florida looks to new rules for keeping nursing homes cool after outages

After national headlines and a public outcry over the deaths of 14 people at a Broward County nursing home after Hurricane Irma, nursing homes across the state are working to comply with new rules requiring them to have back-up power.But the process ...
Published: 02/20/18
Yoshi — car maintenance that comes to you — launches in Tampa Bay

Yoshi — car maintenance that comes to you — launches in Tampa Bay

A California-based company that promises to bring limited on-site car maintenance directly to you — from an oil change to a fill-up — has picked Tampa Bay as its next pit stop."Anything that your car needs, we’re going to bring to you," said Nick Ale...
Published: 02/20/18

Hernando Business Digest for Feb. 23

Business digestEventsCHAMBER RIBBON-CUTTINGS: The Greater Hernando County Chamber of Commerce will have two ribbon-cuttings in the coming week:• Access Health Care Physicians/Dr. Janice Rodriguez, 5290 Applegate Drive, Spring Hill, 10 a.m. Feb. 23. C...
Published: 02/20/18

Pasco Business Digest for Feb. 23

Business digestBrieflyLOCAL COMMUNITY RECOGNIZED: CHUY’S RESTAURANT TO OPEN: Chuy’s, the Austin-based Tex-Mex restaurant, will open its first Tampa Bay area location this spring near Cypress Creek Town Center in Wesley Chapel. The restaurant at 25750...
Published: 02/20/18
Steve Wozniak charms USF crowd: ‘The human or the technology — what’s more important?’

Steve Wozniak charms USF crowd: ‘The human or the technology — what’s more important?’

TAMPA — Steve Wozniak, the inventor of the Apple personal computer, is the tech genius who sounds less like an engineer, more like a philosopher.Startups? They can be a lot of fun — if started up for the right reason."The purpose should never be, thi...
Updated: 3 hours ago
Epilogue: Tourism community remembers Paradise founder Cedar Hames

Epilogue: Tourism community remembers Paradise founder Cedar Hames

When Cedar Hames spoke, you listened.He was a natural storyteller, always dressed sharp to match his wit and natural elegance. He grew a two-person business in St. Petersburg into a leading tourism, advertising and marketing agency over an esteemed 3...
Published: 02/19/18
Updated: 02/20/18