From the Ground Up - Less Beef Drives Higher Consumer Prices

While ranchers are enjoying the high prices their calf crops are bringing, there is some concern that high retail prices may push consumers to look at alternative sources for protein. Pete Scarmardo is a beef producer.

“I don’t think that in my lifetime that we will ever see the cow numbers at the point that we had them at one time, because of all the factors, because of drought, because of the age of the people that own the cow herds, about more land going into other production.”

Those lower numbers are producing higher prices for consumers.

“We’ve always been able to make these cattle a little bit bigger, always continued to keep the supply of beef there. Maybe here now though we’re reaching a limit on how big we can make these cattle, because eventually you get a t-bone or a rib eye that’s too big for the plate, and when you do that, then you’ve got a product that you can’t sell. We’re going to be limited somewhat there on the size of these cattle by the demand from our consumers.”

The restaurant industry wants a certain size steak to serve to fit on the plate that they’re serving to their customer.

“And if you get it too big, then it doesn’t work for them and so we’re going to either come up with different ways to market or to promote it or whatever, but we’re going to have to be careful because size does matter and we can get them too big.”

Scarmardo believes that with prices the way they are there are many consumers that can’t afford to eat beef every time they want it.

“And it’s going to get maybe more where they have to use other forms of protein to supplement their menus instead of beef, which to us, that’s not good, but it looks like maybe that’s what’s going to happen as we continue to produce less and less quantities of beef.”