Iowa, national beef prices continue to rise despite uncertainty in the market


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The effects of last year’s drought continue to have an effect — including on the price of beef.

Prices for beef have continued to rise well into winter.

“It’s a combination of the drought affecting pastures for cows and the drought affecting high prices for corn,” said Nancy Degner, the executive director of the Iowa Beef Industry Council. “Retail prices for beef are up 24 percent since 2007.”

Not only is it more expensive to feed cattle, there are also fewer cattle to fill demand.

“Cattle numbers are at somewhat record lows,” said Lee Schulz, an assistant professor at Iowa State University and an extension livestock economist.

This January, there were 89.3 million cattle and calves in the United States, a 1.6 percent decrease from January 2012.

This is the lowest number since 1952.

Even as consumers continue to see the price of beef skyrocket, officials say the future is uncertain.

“There’s a lot of nervousness in the market,” said Dal Grooms, the director of communications at the Iowa Cattlemen’s Association.

The uncertainty comes from discussion in Congress about sequestration, which would lead to automatic spending cuts. These cuts would radiate out and possibly cause a furlough of U.S. Department of Agriculture inspectors.

“Prices have been decreasing because of the uncertainty in the market,” Grooms said.

However, beef consumers are unlikely to see this decrease anytime soon, if at all.

“It takes awhile for those price changes to work their way to the marketplace,” Grooms said. “If Congress suddenly decides to settle all of its issues, the customers probably won’t see [the price decrease].”

Even as uncertainty in Congress ripples into an uncertain market, the beef industry is attempting to keep the prices down.

“Cattle producers are doing what they can to keep prices down,” Grooms said. “They’re operating efficiently.”

Some of the techniques producers are using include feeding their animals byproducts.

“In reality, we’re producing more beef with fewer cattle than we ever have in the past,” Degner said.

Officials encourage consumers with strapped budgets to look for more economical cuts of beef.

“We’re continually looking for new cuts and products to fit every budget,” she said.

In fact, changes have occurred in how cattle are cut in general.

“We did research to change the way the beef carcass is cut,” Degner said. “Instead of chuck roasts, we have several chuck steaks that work on the grill, which consumers enjoy.”

Local business owner Doug Havel of Bud’s Custom Meats in Riverside has seen the effect of rising beef prices.

“The prime cuts, as far as your steaks, have probably gone up 25 percent in the last year,” he said.
Many consumers are buying alternatives.

“We’re selling a lot more ground beef,” Havel said.

And some are even turning away from beef all together.

“Our pork sales and chicken sale are up 25 percent,” he said.

However Mark Martin, the manager of Nelson’s Meat Market in Cedar Rapids, isn’t worried about the price of beef.

“I think the price is going to settle itself out,” he said. “It pretty much always does.”

Instead, he is worried about the quality. If the price of beef continues to rise, farmers might shy away from producing the more expensive meat.

“My biggest concern is in the summertime, the really good quality meat will be harder to come by,” Martin said.

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