031014 Don't Have A Cow: Beef Costs Up

The Cincinnati Enquirer - U.S. cattle futures hit a 17-year high this week, after a yearlong rise fueled by animal illness abroad and a renewed taste for beef at home.

That's good for ranchers, who are commanding top dollar. But it's bad news for consumers.

Prices have been rising at some regional retail outlets, especially for choice cuts. Meanwhile, most larger grocers and restaurants are absorbing the higher wholesale price - for now.

"This is the highest I've ever seen (prices), and I've been the owner of this business for 15 years," said Bob Lillis, owner of Eckerlin's Meats at Findlay Market in Over-the-Rhine.

"We used to sell rib-eye steaks for $7.99 a pound. Now they're costing us that much. We have to pass the price increase on to customers."

And there's no change in sight, experts say.

Beef prices have risen steadily compared with last year as U.S. suppliers have been hit with unprecedented demand. Meanwhile, imports, especially from Canada, have been restricted for four months because of concerns about mad-cow disease.

Shrinking supplies from Canada - which usually produces from 7% to 10% of beef sold in the U.S. - forced ranchers to send their livestock to the slaughterhouse sooner than normal, which further tightened supplies of domestic beef, said Charlie Blosser, president of the Ohio Restaurant Association.

Moving cattle to market faster has, in turn, cut the volume of choice beef available - raising prices for those cuts even more.

"The less corn and grains that cattle eat, the lower grade of beef," explained Scott Severs, meat and seafood operations manager for Jungle Jim's International Market in Fairfield.

The current price rise "has to do with whether (U.S. government officials) are going to start importing beef from Canada again," Blosser said. "Right now, they aren't letting any import in. If they open up imports, it might stabilize beef prices."

In fact, U.S. suppliers have been allowed to import boxed beef from Canada since Sept. 1 - about four months after the U.S. cut off imports of Canadian cattle after a case of mad-cow disease was found in Alberta.

But the U.S. government still has not allowed imports of slaughter-ready animals from Canada.

Blosser said representatives of the National Restaurant Association met with Department of Agriculture officials this week to try to change that.

But even with increased imports from Canada, domestic beef supplies will be tight for some time, said Gregg Doud, chief economist for the Cattleman's Beef Association.

"Reduced supplies from the world market is one factor” leading to rising beef prices in the United States, Doud said. "But the biggest factor is that we have simply underestimated the demand side of the equation. ... I see nothing on the supply side of the equation in 2004 that would suggest we're going to overwhelm the marketplace with beef."

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