Predictably, opening our borders to older Canadian cattle (previous blog here) has helped cut into beef prices. Strange how we're not seeing much benefit from that at the supermarket. From an article on how the drought in Arizona is affecting its ranchers...
Parsons also said prices that producers can command have plunged 30 to 40 percent in six weeks, though beef prices in stores haven't followed suit.
Factors spurring the drop in ranchers' prices include resumption of cattle being imported from Canada and the cost of grains, Parsons said.
"The cost of grain has really gone up, and that makes the cost of cattle go down," he said. "The producer always gets hit when there is something in the commodities chain that goes up. The farmer, the rancher is the one that's going to get hit - the one on the bottom."
Yearling producers are seeing a 30 to 40 percent price decrease, he said. A 500-pound steer will sell for about 90 cents a pound on the hoof. It was commanding $1.25 to $1.30 a pound six weeks ago, he said.
A comparably sized heifer now brings 80 cents a pound.
Back in 1980, a 500-pound steer brought that same 90 cents a pound. Beef is another of the commodities that has helped keep inflation low for years.
Because of the money squeeze, some ranchers are looking to sell or subdivide some property or are considering other alternatives like on-ranch ecotourism ventures such as hunting lodges.
Meanwhile, the major meat processors and grocers are making a tidy profit on beef.
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