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Published July 15, 2014, 11:55 AM

ND cattle numbers rise with prices

In almost five decades of raising cattle, Frank Matejcek hasn’t seen prices as high as they are today. That’s in part because of a decreasing number of beef cows in parts of the U.S. Matejcek, who runs the Red River Angus farm north of Grand Forks, N.D., with his wife Lucy, notes that cattle are like any other commodity that goes through price cycles.

By: John Hageman, Forum News Service

In almost five decades of raising cattle, Frank Matejcek hasn’t seen prices as high as they are today.

That’s in part because of a decreasing number of beef cows in parts of the U.S. Matejcek, who runs the Red River Angus farm north of Grand Forks, N.D., with his wife Lucy, notes that cattle are like any other commodity that goes through price cycles.

“We’re just enjoying one of the higher cycles,” he says.

While national numbers are down, North Dakota has been able to largely avoid the drought conditions that have helped reduce herds in southern states. In fact, the number of beef cows increased in North Dakota last year.

But that doesn’t mean local meat market owners or consumers are immune to price increases. That’s because beef is traded on global markets, meaning prices will follow larger trends.

“Just because we are fortunate and have more (beef cows) in North Dakota does not mean our prices for beef would be less here,” says Tim Petry, a livestock marketing economist for the North Dakota State University Extension Service. “Our prices parallel U.S. prices.”

Beef cows totaled more than 29 million across the country on Jan. 1, down 1 percent from the previous year, according to the U.S. Department of Agriculture. North Dakota, meanwhile, saw a 2.3 percent increase in beef cows, up to 943,000.

Price jumps

Most retail prices for beef are at record highs, even after adjusting for inflation, according to USDA. The price for ground beef has increased by 29 percent in the past two years, chuck roast has increased by 15 percent and sirloin steak has jumped 18 percent.

A pound of lean ground beef now costs about $5.36, according to USDA.

Brian Holmer, owner of Michael’s Meats in Thief River Falls, Minn., says some customers are adjusting by buying less beef or switching to cheaper cuts. They might also turn to other meats like pork and chicken.

“With beef prices going up, you turn around and that puts a strain on the pigs … and that price is going up,” he says. “And that’ll put a strain on chicken, and chicken’s going to start rising up.

“It’s kind of a domino effect when it comes to meat,” he says.

A recent Wall Street Journal article notes some national restaurants are raising prices or changing up their menus. JL Beers, which has a menu focused on burgers, chips and fries, hasn’t had to change up its menu, despite higher beef prices, according to Lance Thorson, the chain’s part-owner.

“We’ve tried to maintain the same pricing and stuff throughout,” Thorson says. “Being that we have a pretty simple menu we haven’t skimped on portions or sizes.”

Inventory decline

A recent USDA report cites increasing beef exports, flat imports and a prolonged drought in the south as reasons for high beef prices.

“The drought in Texas and Oklahoma has worsened somewhat in the last month, providing further complications for the beef production industry,” a June USDA report states. The beef cow population decreased by 3 percent and 2 percent in the previous two years, according to report Petry wrote in March.

Six of the top 10 beef cow-producing states saw decreases in their herds. The largest decrease took place in the biggest beef cow producer: Texas. The Lone Star State went from 5.03 million beef cows in 2011 to 3.91 million in 2014, according to Petry’s report.

Droughts can limit the size of a herd by reducing the available pasture or hay, Petry says.

“Prices have been high enough that would encourage them to maintain their herds but they just physically can’t because they don’t have the forage to do so,” Petry says.

North Dakota became the ninth-leading beef cow state in 2014, up from 13th in 2010. Jason Zahn, president of the North Dakota Stockmen’s Association, says he expects North Dakota’s numbers to continue to climb, even if the national figures decrease.

Petry says consumers can expect to see higher beef prices for at least another year.

“It’s a very slow process to rebuild herds,” he says.

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