Beef: Itâ??s what was for dinner, and it could become a rarity at the table.
According to the USDA, the price of beef is at an all-time high with the â??all fresh beef retail valueâ?? over five dollars per pound.
Manager of the Dykstra Cattle Farm in Ontonagon, Duane Kolpack, said new energy mandates concerning use of ethanol instituted in the last few years, combined with severe drought in the Midwest, created the perfect storm to beef up prices.
â??Last year, the price of corn was at an all-time high. Most of the cattle fed in the country is fed on corn, and that will invariably drive the price of beef if your feed price is up,â?? said Kolpack. â??Then, with the droughts the last couple of years, that has sent a lot of cattle out of the industry. People have downsized their herds because they havenâ??t had enough feed to feed them. So, that kind of artificially lowered the price of beef two years ago, but now that thereâ??s not as many animals in the system, thereâ??s more demand for the animals that are there.â??
On top of all that, the US cattle herd is at an all-time low in over 60 yearsâ??just less than 88 million cattleâ??and the numbers have consistently decreased for the past seven years, according to a Bloomberg report . A report from the Bureau of Labor and Statistics shows the price of a pound of 100 percent ground beef in late 2009 was just over two dollars and currently stands at about $3.50.
Kolpack said it might seem like a stroke of luck for the farmers, but his expenses are keeping up.
â??It shows more income, but we also have expense on that,â?? he explained. â??The price of fuel is up. The price of all of our inputs are up. The price of equipment is up. In different parts of the country, the price of land is up because of the corn. Thereâ??s a little more demand for growing corn. In the 1980s, you could probably buy a tractor for $40,000, and right now that same tractor is close to $100,000 for about the same horsepower. All of our expenses are up.â??
And experts donâ??t see it coming down any time soon. The Wall Street Journal cites a predicted 10 to 15 percent increase in ground beef prices in 2014 alone.
Kolpack said with the combination of factors pumping up prices, it might just be something we have to get used to.
â??As long as the energy price keeps where it is and the ethanol mandates, this is kind of going to end up to be a new normal, I think,â?? he said.