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It may be “what’s for dinner,” but buying that beef now costs more and prices may not be coming down anytime soon. It’s pretty simple economics because the supply is down, the price of beef is up.
“We’ve been cutting the cattle herd rather steadily, this is the fourth year in a row with reduction in cattle numbers, in fact, the cattle herd is the smallest since 1959,” said Ron Plain, a professor of agricultural economics at the University of Missouri.
He says herds have been trimmed because producers haven’t been making enough profit to expand them, but there are other contributing factors such as the rising cost of feed, growth in the poultry industry and rising exports leaving us with a smaller supply.
Professor Plain says another factor could make this shortage long term.
“We’ve taken a fair amount of our feed grain production and used it to make ethanol to fuel our cars,” said Plain. “The more corn we turn into ethanol, the less corn in available to feed livestock and that has an impact on meat production.”
There aren’t any bargains to be found on other proteins either. Pork production is down with record high retail prices right now. Poultry producers are facing higher feed prices as well.