041180 Record Prices Delight Cattle Ranchers

Fresno, CA - After several lean years, California cattle ranchers are enjoying their second consecutive year of record beef prices, a trend pushed by the nation's high-protein diet fad and a limited supply of beef.

While ranchers say they're likely to bring more cattle to market next year, the high-price trend is expected to continue as demand increases in overseas markets. For consumers, it has meant higher prices for steak, ground beef and roast, but no one seems to mind. Demand remains high.

"We've been in this business for 70 years, and I've never seen prices this good," said Jay Robinson, who grazes 200 head of Angus cattle east of Fresno. He breeds and sells calves, and has seen calf prices go from $589 in 2003 -- itself a record year -- to $744 in 2004.

There are about 10,000 cattle ranchers like Robinson in California, who produce about 5% of the nation's beef cattle.

A case of mad cow disease discovered in Washington state in December 2003 and a subsequent ban on U.S. beef exports in other countries sent a shiver through the cattle ranches of California's San Joaquin Valley.

Nervous cattle producers imagined collapsing prices and frightened consumers, a fear that was at least partly realized: Beef exports dropped 82%, U.S. Department of Agriculture analysts said.

That statistic proved merely a blip, however, to the overall market. Americans watching their waistline by cutting carbs and turning to meat-heavy diets gave an unprecedented boost to the industry.

The consumer demand also came at a time of restricted supply, further escalating the price of beef products.

Ranchers who had thinned their herds during the late 1990s because of low returns and a persistent drought are only now building up the size of their herds.

In the meantime, they're enjoying seeing the price of beef go from $67.04 per hundred pounds in 2002 to an average of $84.97 per hundred pounds this year. That's enough to wash away debt from the lean years, Robinson said.

Superior Stampede, one of the largest cattle-marketing companies in the country, shipped 385,000 head of cattle in October -- a record for the Visalia-based company. The price increase is welcome, but hasn't been generous enough to make cattle ranchers rich, said Chris Nelson, manager of the company.

"We've had a lot of hard years, a lot of drought," he said. "The ranchers really deserved this. They needed it."

Industry analysts predict the prices will hold at least until next year, when the number of cattle will begin climbing again.

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