Tough winter for cattle sends beef prices soaring
WASHINGTON (AP) The harsh, cold winter on the Plains has left cattle thinner than usual and sent retail beef prices soaring to record levels.
Consumers can look for relief this summer, but tight supplies and strong demand are expected to send prices back up later this year, analysts say. Producers are only starting to rebuild herds that they reduced because of drought and relatively low cattle prices in the 1990s.
”We’ve definitely seen the beef prices go up big time,” said Rickey Figueroa, executive chef of Atlanta’s Chops Steakhouse.
The price the upscale restaurant is paying for beef tenderloin has gone from $15 to $20 a pound in recent weeks. So far, the restaurant isn’t changing its menu prices, in hopes of negotiating better deals with another supplier, Figueroa said.
The average retail price for USDA-choice beef reached a record $3.21 a pound in January, breaking the previous record of $3.13 set last September. In the late 1990s, beef prices were averaging about $2.80.
The winter has been so cold and damp that cattle are taking several months longer than usual to fatten up. In bad weather, cattle in feedlots don’t eat as much and use up energy staying warm.
”We have basically had one of the harshest winters that we have seen in a very long time,” said Chuck Levitt, a meat analyst with Chicago-based Alaron Trading Corp. ”The last time we had a winter this severe across the major cattle feeding areas was in 1993.”
Live cattle are selling for 82 cents a pound, up from 78 cents last month and about 68 cents in February 2000.
Americans have rediscovered a taste for beef at the same time that U.S. meat exports are up and many producers have been sending all of their calves to slaughter, rather than holding females back for breeding.
Beef consumption reached 99.5 pounds per person last year, up from 98.7 per person the year before and 95.6 pounds in 1997. U.S. beef sales to Japan and other export markets rose 11 percent in 1999 and another 4 percent last year.
Retail prices will likely moderate as the weather warms and more cattle head to slaughter, but then cattle supplies will tighten over the next two years as ranchers retain their female calves, rather than send them for slaughter, said Agriculture Department economist Ron Gustafson.
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