Farm Horizons, December 2014
Meat prices tough to chew on
By Matt Kane
Daryl Miller has noticed a trend at Ittel’s Meats in Howard Lake.
“A lot of people don’t buy steaks anymore. They can’t believe how much and the difference in the prices,” said Miller, the meat cutter at the 74-year-old family-owned business on Hwy. 12.
Sales of steaks and high-end cuts of beef, especially, have declined as prices have skyrocketed over the past year. Ground chuck had the highest percent increase for a beef product.
According to the Bureau of Labor Statistics, from September of 2013 to September of 2014, ground chuck prices rose 21.1 percent, from $3.360 per pound to $4.068 per pound. In a month’s time, from August to September of 2014, the price on ground chuck rose 5.5 percent, from $3.855 to $4.068.
Miller had to mark up a pound of ribeye one dollar in a week recently, due to a combination of high beef prices and the impending holiday season.
Miller doesn’t know the prices until the delivery driver hands over the invoice.
“It’s week-by-week,” he said. “A lot of these farmers say they aren’t making much at all. And they all have the feed invested in it.”
While beef sales have declined, Ittel’s biggest seller, homemade summer sausage, has not suffered. The small store, can go through 800 pounds of summer sausage in one week.
Big J’s Transport out of Lester Prairie has been transferring cattle for 15 years. The company currently has two 32-foot gooseneck trailers, which are used to haul livestock from farm to the buying stations and from farm to the sales barn.
It was on a delivery when co-owner Lisa Bayerl noticed the high meat prices.
“I was at a sales barn and saw well over $3 (per pound) on feeder calves,” she said.
It all comes down to supply and demand.
“There are less cattle and more people,” she said. “The population of animals around are at an all-time low. The number of cattle is the same number in population as it was in 1950.”
The decline in population can be blamed on the blizzard of the 2011-12 winter in South Dakota and Montana and the draught in Texas in 2013. Both weather phenomenons wiped out farms and ranches, some of which did not rebuild.
The inflation in beef and pork prices in Minnesota has to do with the national supply and demand, and is not based solely on local numbers.
Beef is not alone when it comes to price increases. Pork prices are up significantly from a year ago, but some have fallen slightly in a month.
From Sept. 2013 to Sept. 2014, the price of boneless chops rose 14.5 percent, from $4.072 to $4.664 per pound, but, from Aug. 2014 to Sept. 2014, prices were down 0.3 percent.
The steepest yearly price increase in the pork industry was in the “All other Pork” category, where prices increased 25.3 percent in a year’s time, from $2.553 in 2013 to $3.199 in 2014. From Aug. to Sept. of 2014, the increase was 0.4 percent.
The increase in pork prices can be linked to the Porcine endemic diarrhea virus (PEDv) that killed about 7 million pigs in 30 states since last April.
The increase in beef and pork prices has not bled into the poultry market. In fact, across the board, prices on chicken and turkey were down in both the yearly and monthly time periods.
In just a month, from Aug. to Sept. of 2014, the price of a whole frozen turkey plunged 6.6 percent, from $1.972 to $1.842 per pound. Boneless chicken breasts are down 3.6 percent from a year ago, from $3.632 to $3.503 per pound, and were down 0.7 percent from Aug. to Sept. of 2014.
“It is a slow climb out of the hole and it will stabilize,” Bayerl said. “As of 2014 and in 2015 we are starting to build. The futures are showing that leveling off will happen. (Prices) will still be on the high side but will start to come down.
“The ranches are coming back slowly.”