MORE

Lessons in Recessionomics: Beef Prices, a Historic Drought and Hamburger

Lessons in Recessionomics: Beef Prices, a Historic Drought and Hamburger

As my grandfather would say, "It's drier than a popcorn fart." We're smack-dab in the middle of the worst one-year drought ever. The costliest too. Feed prices are nearly unaffordable. Stock tanks are drying up. But the final boot to the gut of the Texas rancher never came.

It's the strange artifact of this drought: Beef prices remain solid.

Bizarre, no? Sale barns have seen their runs doubled and tripled. It's gotten bad enough that even reliable breeding cows are ending up at the packer -- not quite suitable for the sweet cuts, but just right for hamburger. The market has been glutted with minced meat. So why, then, haven't prices taken a nosedive?

The economy, stupid. Fifteen percent of us lived in poverty in 2010, according to a Census Bureau report released today. Job growth stagnated in August. Know what that means?

Ground beef for everyone!

These are Hamburger Helper days we're living in, folks. Who can afford steak? If the glass is half full, our appetite for chucks and rounds is apparently insatiable, buoying a beleaguered industry that might otherwise implode.

"People are stretching their dollar," Dr. David Anderson, A&M extension economist, tells Unfair Park. "They buy more hamburger and fewer steaks, so we have more demand for what we're culling. Wholesale prices for rib-eye are pretty close to the average price for last five or six years.

"Really lean hamburger is higher."

That's good too, because if you've been by a cattle auction recently, lean, drought-stressed cows abound.

Now for the half-empty glass. Beef prices should remain high into the foreseeable future, but only because we had to butcher a bunch of cows. When the USDA releases its January report, expect the biggest year-to-year reduction in the cowherd we've ever seen.


Sponsor Content

Newsletters

All-access pass to top stories, events and offers around town.

Sign Up >

No Thanks!

Remind Me Later >