Iowa Public Television


Demand Drives Retail Beef Prices Higher

posted on June 3, 2005

On the heels of its decision last week to uphold the BEEF checkoff, the U.S. Supreme Court this week set aside a lower court ruling that found the PORK checkoff was UNconstitutional. That means the lower court now must reconsider its ruling in light of the high court's decision on the BEEF checkoff.

Opponents of the mandatory pork checkoff said they were disappointed with the course of events over the past two weeks, but vowed to continue their fight.

Backers say the checkoff programs are needed to support research and marketing campaigns that help sustain the pork and beef industries.

Consumer demand may bear that out. Sparked by the high protein diet craze, demand for meat, especially beef, continues to rise ... right along with its retail price.

Demand Drives Retail Beef Prices Higher This summer, grills are firing up all across the country and cattle producers are happy to supply the beef. Retail beef prices are near record highs thanks to tight supply, high demand, and rising fuel costs. In April, the average retail price of beef approached $4.25 a pound, according to the Agriculture Departments Economic Research Service.

Cattle inventories began to shrink in the mid 1990s, thanks in part to an extensive drought that devastated western rangeland.

The nations cattle herd peaked in 1996 with 103.5 million head. As of Jan. 1st of this year; there was only 95.8 million head, according to USDA

In turn, demand has grown; the nation has gotten over the mad cow disease scare and is hungry for beef.

The average beef price of $4.25 in April is the highest since November 2003. June prices are expected to drop slightly to between $4 and $4.10. Demand will slow as the grilling season progresses.

Beef prices have climbed steadily in recent years; from $2.87 in 1999 to $4.06 in 2004. Beef consumption has increased by 25% since 1998.

Ranchers are working to meet the growing demand by expanding their herds for the first time in 5 years. Even so, beef prices are expected to rise consistently in the future to balance the supply and demand of beef.

Tags: agriculture animals beef cattle livestock Mad Cow markets meat news