Where’s the beef? Declining cattle numbers mean high meat prices

2014-03-06T00:00:00Z Where’s the beef? Declining cattle numbers mean high meat pricesALLISON GEYER ageyer@lacrossetribune.com La Crosse Tribune

Beef might be what’s for dinner, but as prices soar to historic highs, some may think twice about keeping it on the menu.

The average price for a pound of fresh beef reached $5.04 in January, the highest on records that date back to 1987, according to the U.S. Department of Agriculture.

The lingering effects of drought in California, the Great Plains and Texas have led to the smallest U.S. herd size in the past 60 years, said Austin Arndt, president of the Wisconsin Cattlemen’s Association. The dwindling supply, coupled with record beef exports in 2013, means high prices for consumers nationwide.

Holmen Locker and Meat Market owner Scott Stettler has seen wholesale beef costs jump 60 cents a pound over the past few months.

“This is an all-time high,” he said.

Due to seasonal demand for roasting cuts, the price increase has been more dramatic for beef rounds, chuck and rumps. Other cuts, such as porterhouses, rib-eyes and strip loins, have held steady.

“It’s kind of weird when you can buy top butts (sirloin steaks) a little cheaper than you can buy chuck,” he said.

Stettler absorbs some of the price increase to keep products affordable for his customers, but he has had to adjust in order to meet profit margins. Other retailers have been forced to do the same, he said.

“Everybody across the board is raising price, and customers have seen that,” he said. “Yeah, prices are up on the beef, but people still have to eat.”

It’s bad news for budget-conscious shoppers, but a bull market for beef producers.

“It’s great when you’re selling,” Viroqua cattle farmer Dan Jacobson said.

The price of feeder calves – young steers and heifers sent to feedlots to be fattened up before slaughter – has soared to about $1.90 per pound, he said. Fed cattle prices are about $1.50 per pound.

“Those numbers transfer right into the grocery store,” he said. “We’re seeing a lot of $4 and $5 hamburgers.”

He has about 40 cows due to calve this year – his lowest number ever. And with livestock producers across the nation taking advantage of the high sale prices for their cattle, herd numbers likely will remain low for the next few years, Jacobson said.

There is a benefit, though. With a high incentive to sell, farmers have the opportunity to cull inferior cows and bulls and improve the overall genetic quality of the herd, he said.

“People say, ‘Sell your calves and hit it rich this year,’ but then I remind them of the year we sold all our feeder calves for less than we had in them,” he said. “It’s all cyclical.”

While dairy still reigns supreme, Wisconsin in 2013 ranked third nationwide for growth in the number of beef cattle. The state has about 14,800 beef producers, compared with about 11,000 dairy producers, but the dairy farms tend to be larger operations.

Many dairy farmers transition into beef as they approach retirement, Arndt said. They sell their dairy herds but still have ample pasture space — perfect for grazing beef cattle.

“I think Wisconsin has a lot of potential for further growth,” he said.

Copyright 2015 La Crosse Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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