Lessons in Recessionomics: Beef Prices, a Historic Drought and Hamburger

Categories: Biz

ground-beef.jpg
As my grandfather would say, "It's drier than a popcorn fart." We're smack-dab in the middle of the worst one-year drought ever. The costliest too. Feed prices are nearly unaffordable. Stock tanks are drying up. But the final boot to the gut of the Texas rancher never came.

It's the strange artifact of this drought: Beef prices remain solid.

Bizarre, no? Sale barns have seen their runs doubled and tripled. It's gotten bad enough that even reliable breeding cows are ending up at the packer -- not quite suitable for the sweet cuts, but just right for hamburger. The market has been glutted with minced meat. So why, then, haven't prices taken a nosedive?

The economy, stupid. Fifteen percent of us lived in poverty in 2010, according to a Census Bureau report released today. Job growth stagnated in August. Know what that means?

Ground beef for everyone!

These are Hamburger Helper days we're living in, folks. Who can afford steak? If the glass is half full, our appetite for chucks and rounds is apparently insatiable, buoying a beleaguered industry that might otherwise implode.

"People are stretching their dollar," Dr. David Anderson, A&M extension economist, tells Unfair Park. "They buy more hamburger and fewer steaks, so we have more demand for what we're culling. Wholesale prices for rib-eye are pretty close to the average price for last five or six years.

"Really lean hamburger is higher."

That's good too, because if you've been by a cattle auction recently, lean, drought-stressed cows abound.

Now for the half-empty glass. Beef prices should remain high into the foreseeable future, but only because we had to butcher a bunch of cows. When the USDA releases its January report, expect the biggest year-to-year reduction in the cowherd we've ever seen.

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GAA
GAA

Sacred cows make the best burgers.

pak152
pak152

The following are facts about persons defined as “poor” by the Census Bureau as taken from various government reports:

80 percent of poor households have air conditioning. In 1970, only 36 percent of the entire U.S. population enjoyed air conditioning. 92 percent of poor households have a microwave. Nearly three-fourths have a car or truck, and 31 percent have two or more cars or trucks. Nearly two-thirds have cable or satellite TV. Two-thirds have at least one DVD player, and 70 percent have a VCR. Half have a personal computer, and one in seven have two or more computers. More than half of poor families with children have a video game system, such as an Xbox or PlayStation. 43 percent have Internet access. One-third have a wide-screen plasma or LCD TV. One-fourth have a digital video recorder system, such as a TiVo.http://www.heritage.org/research/repo...

Mavdog
Mavdog

70% are still using a VCR? holy cow, anyone who is still recording stuff on a tape cassette is about as broke as can be. heck, the cable and satellite companies will GIVE you a DVR for NOTHING if you have two nickles to rub together.

That's a great measure of just how poor these households truly are, and by golly it's damn poor.

mynameisURL
mynameisURL

I have been wondering for quite some time now where all of the VCR's went.

Finally, I'll get some sleep tonight!

Brantley Hargrove
Brantley Hargrove

We like our poor people really, really poor. Like fucking destitute, sod-floor, drafty-hutch poor. Also, the Heritage Foundation?

Charlington76012
Charlington76012

It's called context. Check it out sometime.

Paul
Paul

The question is "What is poor?".

From the statistics cited on the Heritage website, one can also make the following conclusions:

4% of parents state that their children were hungry because they could not buy food.

17% of poor families report not having enough to eat.

18% of poor adults were hungry last year due to a lack of money.

The causes of true poverty are manifold where poverty is defined as lack of shelter and food.

Brantley Hargrove
Brantley Hargrove

Right. Context from the Heritage Foundation. And here's a little more: They hate poor people, so watching them poke holes in a disturbing poverty report from the Census Bureau is predictable.

Oak Cliff Townie
Oak Cliff Townie

Ground Beef ?

Have you checked the price lately  ?

Who has money for ground beef ? 

Paul
Paul

EET MOR CHIKIN

Seriously, Texas's agricultural sector is in a huge fix ... it is a large part of our state's economy and as the ranches and farms shut down it will have an impact upon the state.

Sal Munella
Sal Munella

Don't eat charred, dead flesh! Save the cows!

TimCov
TimCov

That's right. Remove the economic reason for people to bring them into the world. That way they will be left to starve or else be euthanized.

Bill Holston
Bill Holston

was at a funeral last week, of a lady with multiple generations in the ranching industry.He said people were leaving in droves (so to speak). No new ranchers entering the business. That will eventually impact price. He said the one thing that must change is Corn/ethanol, as it is effecting feed prices. 

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