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Beef prices rise as past droughts hit home

KANSAS CITY, Mo. — If beef is on the menu, firing up the grill this year will cost you more than ever.

And not just a bit more. The average price of a sirloin steak is up almost 20 percent from a year ago. An 8-ounce filet mignon costs $15 or more at some Kansas City area stores, for example, or you can get six shipped online to your door for $180.

Two pounds of extra-lean ground beef can set you back $12, a couple of dollars more than a year ago. The price increases are being felt throughout the country.

Backyard cooks can blame, in part, the Midwest drought of 2012. Its aftershocks are apt to keep beef prices at record levels throughout this grilling season, say ranchers and economists.

Chicken and pork? Those prices have barely budged. Bacon on average has gotten cheaper.

Yet in the Midwest, in the heart of beef country, the high prices that cattle are fetching have just begun to flatten in recent weeks, said Jim Hertzog of Mo-Kan Livestock Market, a sale barn in Bates County, Mo.

"Supply is light and demand is good," he said. "Heck, you know how good a steak tastes."

Kansas and Missouri beef farmers not cashing in are catching up. Many who reduced their herds two or three years back, when grasslands were drying up, are now trying to expand them.

In time, the increased supply of cows should stabilize beef prices at the grocery counter, said Glynn Tonsor, an agricultural economist at Kansas State University.

But he noted that cattle, unlike fast-growing chickens or pigs, require about three years to breed and fatten for slaughter. Just as in humans, it takes nine months for a pregnant cow to deliver a healthy calf.

"We're probably a year and a half away from any notable reductions in beef prices," Tonsor predicted.

Meanwhile, some Kansas and Missouri beef growers are enjoying a respite from years of lost earnings.

"A lot of farmers are buying, but these prices are too high," said Tyler Shaw, who raises livestock near Nevada, Mo. "I'm just selling and enjoying the ride. It's a great time to get caught up on bills and debt."

Cody McIntosh of La Cygne, Kan., walked the barn intending to buy a couple of dozen calves. He planned to fatten them up on grains for a few months and hoped to sell at a profit.

"A year ago last November, for 350-pound calves I paid $1.80 a pound," McIntosh said. "Today, I might pay $3, $3.50 a pound."

It's a gamble, like everything else about agriculture. But some analysts say the factors contributing to rising beef prices extend beyond fickle weather to a variety of forces more systemic and long term.

For example, fine cuts of beef are getting tastier and more tender — thus pricier — by the year. Eureka, Kan., rancher Matt Perrier attributed the leaner, more consistent properties of today's beef to genetic modifications and better management practices.

"All classes of beef right now are priced at levels higher than they've ever been," said Perrier, who farms land owned by his family since the 1860s. He said cattle producers have been working hard to satisfy pickier eaters since the 1980s — when consumer tastes shifted away from beef and more toward poultry.