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Texas drought means higher beef prices

Adriene Hill Sep 2, 2011
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Texas drought means higher beef prices

Adriene Hill Sep 2, 2011
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Jeremy Hobson: To all you meat lovers out there, you better savor that Labor Day barbecue this year. Because the price of beef is headed for a stampede next year and beyond. The reason is deep in the drought
of Texas.

Marketplace’s Adriene Hill reports.


Adriene Hill: This is a story best told by ranchers living the drought. Guys like Pete Bonds.

Pete Bonds: Hello!

He’s got a whole lot of cows.

Bonds: Tens of thousands.

And not enough water.

Bonds: The worst drought that I’ve ever seen.

And even the old timers, he says:

Bonds: A bunch of old men that have seen the droughts of the ’50s and ’30s and even the teens.

Even those old men haven’t seen a drought like this one.

Bonds: This one, it has just flat forgot to rain.

And ranchers who don’t have rain don’t have a lot of choices. They can buy hay, but hay is expensive, because hay is grass and grass takes rain.

Bonds: And where it has rained is a long way away from Texas.

So ranchers are sending their cows to the slaughterhouse — the older ones first. David Anderson is a livestock economist in Texas.

David Anderson: We make a lot of hamburger out of older cows.

He says right now, hamburger prices are lower than they would have been without the drought, because more cows are being killed. But that’s a problem for the future.

Anderson: Because ever cow that’s gone now is one less calf next year, which is going to become less beef the year after that.

And that means higher prices. Anderson expects the cost of hamburger to go up first, sometime early next year, and the price of t-bones and roasts to jump in 2013. I suppose you could call it the “high steaks” of this Texas drought.

Bonds: I mean, if a cow is even thinking about getting old, she goes.

I’m Adriene Hill for Marketplace.

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