The End of Cheap Beef -- Good article on the rise of beef prices and why they aren't expected to go down any time soon

Wampus

somebody shut me the fark up.
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The article is centered around the Texas market and is geared toward restaurateurs, but still some good info as to why we should all expect higher beef prices for some time.


http://www.tmbbq.com/the-end-of-cheap-beef/

That beef is more expensive than it was a year ago is no surprise, and this trend doesn’t look to be easing up anytime soon. As David Anderson, a Texas A&M professor of ag economics, told a room full of barbecue joint owners last month at the university’s first-ever Barbecue Town Hall, retailers should plan on two or three years of elevated pricing.

Of the many slides he presented that illustrated the corn, pork, and beef markets, the one on average wholesale prices of beef showed that numbers steady since mid-July—around $3.00 per pound—up significantly from 2013’s price of $2.20. Brisket is even worse. This past week the price for whole, choice briskets was $3.45 per pound, up from $2.14 a year earlier. On Friday, Urner Barry, a research company that tracks commodity markets, provided some bad news about the immediate future for pitmasters. Brisket prices will continue to rise to record levels.

Stephen Joseph, the owner and pitmaster of Riverport BBQ in Jefferson, Texas, said he’s already seeing the difference. His beef supplier warned him to expect a rise of $0.25 per pound next week so he added a bit more to his order this week trying to stave off the financial affects from his most popular menu item. At the Town Hall, I asked the crowd what other proteins they’ve tried to highlight other than brisket. Russell Roegels of Rogels Barbecue Co. in Houston said “any special we have is anything but beef.” Others pointed to chicken or even pork since prices have gone down recently. Smoked turkey breast is another popular option. It’s primarily sold frozen and has only one predictable seasonal price spike per year.

There’s also not much loss in a lean smoked turkey breast, but let’s face—Texas is a beef state. “We’re all looking for new proteins to serve,” says Wayne Mueller of Louie Mueller Barbecue. “I don’t think we ever want to get out of the beef business, because it’s essential to who we are.”

Just like we got used to high gasoline prices and accepted them as a fact of life, we need not be shocked when brisket prices continue to rise at our favorite barbecue joints. And just like we are now seeing sub-$2.oo gasoline now, those beef prices will go down eventually. The problem is that it just takes so long to get a new crop of cattle. The cattle population has been ravaged by drought, much like the hog population was decimated by PEDv earlier this year, but it takes only eight months for a new litter of piglets to reach slaughter weight (including the gestation period). Calves, however, require about 27 months for the same and are born one at a time. That’s why the folks at Texas A&M are predicting another two or three years of high demand and low supply resulting in the high prices we’re seeing today.

But if demand hasn’t decreased with such high prices, why will the price ever go down for beef? “Producers respond to making money and increase herd sizes,” reminded Anderson, “and producers want to keep the feed lots full.” They just run more efficiently that way. In the meantime, feed lots are trying to keep up with beef demand by producing bigger cattle. Anderson presented data showing a record high dressed weight average that occurred in November of 2014. The average beef carcass then was at 905 pounds, up significantly from 840 pounds last May. That means an average brisket that was twelve pounds will now be thirteen.

Texas A&M’s Dr. Davey Griffin shared an anecdote from a recent beef plant visit. He stood for an hour watching the weights of every carcass that passed. “The lowest we saw in that time was over 900 pounds.” The popular Certified Angus Beef program has responded to the ballooning cattle trend by increasing their maximum allowable carcass weight from 1000 to 1050 in November. As Dr. Jeff Savell of Texas A&M shared with the Town Hall meeting, “probably, for the rest of your life you’ll be dealing with bigger cuts than you’re used to.”

This increase in size is due to several factors including improved genetics, more efficient feeding programs, and growth promoters. In fact, 95 percent of cattle receive a growth promoter like Optiflexx that adds about 20 pounds to a steer. But the big difference these days is the cheap feed. The bulk on cattle comes at the feedlot where they’re fed a corn-heavy diet, and corn is cheap these days so producers are leaving cattle on feed a little longer to get those extra few pounds.

Many barbecue joints have a preference for smaller briskets because they tend to cook more evenly. Beef suppliers are happy to meet their needs as long as there are smaller briskets to provide. As Griffin demonstrated, some beef producers might even cheat on how they cut the briskets to help reduce their size, but those long skinny briskets have a very thin cut edge which results in overcooked, and therefore wasted meat. Barbecue joints will serve themselves better to adapt to the larger briskets coming their way.

Pitmasters could also take some frugality lessons from the past. Our rich history of sausage making in this state was born from scraps, the same scraps that often find their way into the trash in restaurant kitchens. Wayne Mueller credits a trio of homemade sausages for helping to keep his business profitable. Every bit of trim from his briskets and ribs goes into the mix. At Corkscrew BBQ in Spring, Will Buckman puts a pan of trimmings directly into his smoker and uses the smoke-rendered tallow to flavor his beans and other dishes. As Dr. Savell reminded the room, brisket fat has more mono-unsaturated fatty acids than other cuts of beef, making its tallow closer to pork lard in structure. Maybe smoked tallow pie crusts are next.

Another option would be to look at different beef cuts. With the explosion of barbecue’s popularity across the country, brisket will continue to come at a premium. It’s currently up 61 percent from the previous year, but what about other cuts from the forequarter that the old time meat markets used to smoke? A cut like the boneless chuck roll is only up eleven percent over the same time period, and shoulder clod is just 21 percent higher. Depending on your supplier, you might not have to consider different cuts at all. David McLain, a rep from Ben E. Keith, told me via Twitter, “I’d still like to get some people to try 119’s.” These are whole briskets with the deckle still on. McLain continues that those 119’s are “$0.50/lb cheaper right now. We have 1600 cases on hand.”

Your move, pitmasters.
 
That's a lot of info,well put, bottom line is it ain't gettin no cheaper, heck I can hardly afford beef now, somebody said that we can get European beef now, will that help in the pricing?
 
urban gardening sure is sounding good right about now. i could use more vegetables in my diet anyway.
 
In Texas, beef was cheap just a couple years ago.

It's all cyclical, as my income cycles down, beef will become less of my diet.

It also makes perfect sense from a business point of view, why should I sell brisket at $1.50 a pound, when I can sell just as much of it for $2.50 a pound. And since the hottest market going is the $8 hamburger, where is my incentive to drop the price to sell more of even that product?
 
I don't doubt the beef and pork critter problems but it seems to me that with these ridiculously low fuel prices right now that transportation costs for feed, distribution etc would offset these prices more that we are currently seeing.
 
I'm kind of happy. Before I put my glasses on to read the thread, it looked like the end of cheap beer.
That got my attention.
 
I don't doubt the beef and pork critter problems but it seems to me that with these ridiculously low fuel prices right now that transportation costs for feed, distribution etc would offset these prices more that we are currently seeing.

Same thing I thought.
 
I don't doubt the beef and pork critter problems but it seems to me that with these ridiculously low fuel prices right now that transportation costs for feed, distribution etc would offset these prices more that we are currently seeing.

My wife just said the same thing yesterday, after a trip to the store:" They were quick to raise the prices when gas went up .10 now it has gone down 1.00 and they aint coming down at all"!
 
I personally hope ground beef goes to $20 per pound.Not for hardships on you guys,I just remember when our calf crop sales price would not even cover our expenses.It all cycles,look at gas prices.Win some,lose some.I hate it for the consumer though.Middlemen make the smack.
 
I believe all of it. Prime brisket at the store I buy is up to $4.25/lb (I know it's much more in other parts of the country. As much as I like brisket, it's a junk piece of meat that requires a lot of prep and cooking care. We really only buy that and ground when we buy beef now. Less beer and more pork and bird for me. Maybe I'll be motivated more to get out and hunt!

The most sad part, is how much obesity is linked to finances of a large number of folks.... It's going to make it much harder to eat good meats and vegetables with rising food prices.
 
I don't doubt the beef and pork critter problems but it seems to me that with these ridiculously low fuel prices right now that transportation costs for feed, distribution etc would offset these prices more that we are currently seeing.

Its feed prices, and lack of rain, along with ethanol putting a lot of pressure on corn prices. A few years back they started cutting herds because of drought, that was back when prices hit there lowest, (they were cutting herds) it will take a few years to catch back. The fuel demand and production just caught themselves, and they will correct, it will be back over $100 a barrel inside of 2 years.
 
Prices as the saying goes are up like a rocket and down like a feather. The other day on the news analyst stated that companies who rely on the price of oil and fuel such as commodities transport and passenger services are loving the low prices and the increases to their bottom line as they feel this is making up for when they had to tighten up their belts so to speak. Bottom line they ain't lowering prices cause their costs went down.
 
Prices as the saying goes are up like a rocket and down like a feather. The other day on the news analyst stated that companies who rely on the price of oil amd fuel such as commodities transport and passenger services are loving the low prices and the increases to their bottoms line as they feel this is making up for when they had to tighten up their belts so to speak. Bottom line they ain't lowering prices cause their costs went down.


exactly, they tightened there belts when gas was high (they did not want to lose market share to another company) and they are breathing again.
 
Gonna take 18 months for cheaper oil prices to bring down the cost of beef.
What is the oil factor in beef?
Production of grain for feed.
Delivery to slaughterhouse.
Post-slaughter delivery.
Plastics.
On a 900 pound carcass will the cost of oil amount to $5? $50?
I'm asking, no idea.
 
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