Posted on 01/13/2014 5:14:13 AM PST by SoFloFreeper
Select grade beef has hit a record high this week. The weather has an impact, but thats not all...
Beef prices will increase by 2.5 to 3 percent this year, according to the USDA.
For some peoples' diet its gonna be a pretty big chunk of change, says George Lesznar of Harveys Market in D.C.
U.S. cattle cost more because of a rebound effect from several years of drought in major producing places like Texas, Nebraska, and Kansas. With the increased cost of feed some ranchers reduced their herds. The USDA called Americas cattle herd the smallest in 60 years. Large meat companies are paying record prices for cattle now, and that price will soon be passed along to the consumer.
Ill see what the prices are and if that means I have to cut back on the meats I eat, says Amy Batchelor.
(Excerpt) Read more at wjla.com ...
Obamanomics.
The article, in a RARE example of intelligent economic analysis in the mainstream media, informs the reader that pork and chicken prices will likely also rise as demand for these “beef substitutes” goes up.
Ground pork is $1.99/pound every day.
We’re slaughtering our steer next week. We’ll be good for a while, ‘till we slaughter the next one.
For some peoples’ diet its gonna be a pretty big chunk of change,
Unless, of course you are one of the 47 million people collecting food stamps. They can afford all the beef they want.
What’s this about “increased cost of feed”? A search for “low corn prices” shows plenty of recent articles, including very welcome articles about the ethanol industry being on its heels.
Eliminate ethanol subsidies an requirements and meant prices will go down at least 25%.
And gas prices would see a similar drop.
Remember folks, substituting pork or chicken for more-expensive beef doesn’t count in the inflation numbers. And if pork and chicken prices go up as well, putting more beans in your chili or more peanut butter sandwiches also doesn’t count as inflation.
The rise in the price of beef is not yet done. When the prices reach this level, the slaughter of the breeding herd (heifers as well as steers) goes up sharply, and tied to the somewhat lower prices of what had been expensive feed (corn had hit high levels, but with the cutback in the demand for motor fuel, ethanol production is down while corn is plentiful), it makes short-tern economic sense to sell as many animals for slaughter as possible, thus the potential breeding herd is much diminished. Cattle numbers stay relatively low, but since the price of beef is so high, the demand is much diminished, until economic reality sets in again at the farm and ranch level. The cycle for beef is normally about 4-5 years to reach a peak from the low point of the market, and another 4-5 years before the numbers of cattle for slaughter is so great as to depress the price to its bottom level again. This cycle has to do with the biology of the beef cattle.
The young heifer is ready for breeding at about 18 months of age, but it is something like nine months gestation period, and only one young is produced at a time, with one per year following until the mature cow is 10-12 years of age, at which time she is “retired”, i.e., sent to market as “cutter” beef (dog food). Some 52% of the young produced are male, which are emasculated at a very early age, and raised as neutered steers, the primary source of market beef. The other 48% are potential breeding heifers, and when beef prices are low, they are held back from the market, thus making a potential future expansion possible.
images.beef-mag.com/files/13/dvmpt1.pdf
This link gives a more detailed and comprehensive overview of what the “beef cycle” is, and its long-term effects.
The price of beef has not a damned thing to do with Obamanomics. It obeys its own set of rules, only controlled by the biology of cattle and the supply of feed, i.e., years of drought or plentiful harvest.
Not to worry, I’ll just hedonically substitute sawdust for steaks and have an equivalent standard of life.
Here's a good suggestion: don't believe everything you read on websites that try to sell you gold.
</I>non sequitur</i>
Here’s a better suggestion. Go grocery shopping with your wife next week. The prices keep rising while the packages keep shrinking.
Common Misconceptions about the Consumer Price Index: Questions and Answers.When the cost of food rises, does the CPI assume that consumers switch to less desired foods, such as substituting hamburger for steak?
No. In January 1999, the BLS began using a geometric mean formula in the CPI that reflects the fact that consumers shift their purchases toward products that have fallen in relative price. Some critics charge that by reflecting consumer substitution the BLS is subtracting from the CPI a certain amount of inflation that consumers can "live with" by reducing their standard of living. This is incorrect: the CPI's objective is to calculate the change in the amount consumers need to spend to maintain a constant level of satisfaction.
Specifically, in constructing the "headline" CPI-U and CPI-W, the BLS is not assuming that consumers substitute hamburgers for steak. Substitution is only assumed to occur within basic CPI index categories, such as among types of ground beef in Chicago. Hamburger and steak are in different CPI item categories, so no substitution between them is built into the CPI-U or CPI-W.
Furthermore, the CPI doesn't implicitly assume that consumers always substitute toward the less desirable good. Within the beef steaks item category, for example, the assumption is that consumers on average would move up from flank steak to filet mignon if the price of flank steak rose by a greater amount (or fell by less) than filet mignon prices. If both types of beef steak rose in price by the same amount, the geometric mean would assume no substitution.
I’ll let my neighbor know. We’re splitting it and it’s hanging around the rest of his livestock.
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