I always hate to be the bearer of bad news but the current drought in the Midwest (the worst since 1956) has delivered some very disturbing forecasts this week. The corn crop is not doing well at all, which is going to hurt the farmers and ranchers, the cattle, poultry pork and ethanol industries, and eventually, consumers. Cattle are being liquidated in many areas of the country right now because it will be too expensive to feed them this winter due to the higher cost of feed. Ethanol producers using corn as feedstock are also going to be facing some even tougher times in the near future, and it is possible that the situation could slightly raise the cost of gas at the pump, too. The beef industry will likely be feeling the effects of this drought for the next several years.
Why so long, you ask? It takes about a year-and-a-half from the time a calf is born until it is ready to go to market as a heifer or steer. (Chicken and pork have much shorter time frames from farm to fork.) So, unfortunately, in the short term, the price of beef may be very reasonable because supplies are good. However, the price of beef will likely rise as the price of feed increases and the availability of cattle ready for market decreases. These higher costs will have to be passed on to the consumer in order for the processor to make a profit.
“Beef, it’s what’s for dinner.” Unfortunately, the dinners are likely to be more expensive in the not-too-distant future.