While I can’t read everything that shows up in email form, I did see a few stories last week that caught my eye. Since I love a good steak now and again, I couldn’t help but notice a story about rising beef demand, as well as rising beef prices.
While much of the cost of a steak or pack of ground beef at the supermarket has more to do with processing the product than production, what’s happening in the beef markets these days is indicative of much of what’s been happening across the nation’s farm belt.
As you probably know, grocery prices are still on the rise, up another 6.5 percent from a year ago, according the American Farm Bureau’s Market basket Survey. Leading the way was beef. With 96 percent of Americans claiming they eat meat, it might be easy to decipher that the reason for the increase is that we love our beef. That’s true, but our love of burgers and rib-eyes is only part of the equation.
The peak of the grilling season is upon us. As summer approaches more and more of us will be firing up the grill, gathering with friends and family and laying out those thick, juicy steaks on the fire. (Can you smell it?) But it’s not just Americans who love and want more beef. It’s the increase in the standards of living of folks in developing countries like Mexico , China and India that’s also driving up beef demand.
Now, you might question including China in a list of developing countries. China is a global powerhouse, no doubt, but what the country really has is a massively expanding middle class. It’s been shown time and again that the first thing folks with money want, who didn’t have money before, are sweets and meat. Hence the rising cost of sugar and beef.
Sugar prices to Louisiana sugarcane growers are as high as they’ve ever been, at least in the active memories of most sugar Bayou State sugar farmers. And any cattle producer will tell you that when beef prices go up, herd size goes down. Problem is, more cattle in the marketplace has done little to lower prices because beef demand globally has remained so high.
According to USDA’s monthly ag-trade summary, January and February beef exports to Russia were up 58 percent in volume at 9,297 metric tons, and tripled in value to $38.2 million compared with last year. The same was true for Mexico . Mexico was the leading destination for U.S. beef in terms of volume during January and February, at 38,070 metric tons, and value at $170.6 million. This represented a decrease in volume of 6 percent, but a 13 percent increase in value.
Beef exports to Canada, which was the only $1 billion market for U.S. beef in 2011, slipped 3 percent in volume to 24,072 metric tons but increased 11 percent in value to $136.9 million for the first two months of this year. January and February exports to Japan, which still limits imports of beef from cattle 20 months of age or younger, were down 5 percent in volume at 19,344 metrictons, but increased 16 percent in value at $123.6 million.
All these numbers will help the U.S. with its balance of trade with its import partners. It’s also a sign of an uptick, albeit a small one, in the U.S. economy.
But what all these numbers really show is that finally (perhaps), after nearly three decades of struggling prices, farmers and ranchers might actually feel really good about what they’re producing. Some might say this is the decade, at least for now, of the farmer and rancher. And one thing’s for certain. America ’s farmers and ranchers produce the most abundant, affordable, safest food in the world. And no statistic can overshadow that fact.