Cows in Bastrop, Texas -- 30 minutes east of Austin -- at a grass-fed beef ranch.
Cows in Bastrop, Texas -- 30 minutes east of Austin -- at a grass-fed beef ranch. - 
Listen To The Story


Bob Moon: Got some extra change this holiday weekend? You might need it if you're stocking up for your big cookout. Beef prices are nudging up.

Erika Aguilar reports from KUT in Austin, Texas -- the largest beef-producing state in the country.

Erika Aguilar: It's a classic tale of supply and demand. You're paying higher prices for steak because there just aren't enough cattle in the market these days. It started last year during a prolonged drought.

Rancher Ken Persyn is at the Lockhart Livestock Auction. The drought forced him to sell off some of his herd.

KEN PERSYN: A lot of ranches liquidated their cattle, sold out because they didn't have anything to feed them. There was no grass. And right now they're rebuilding their herds now, buying and restocking.

Ranchers in the Midwest had to deal with the opposite weather. Cows braved a snowy, bitter winter. They burned up calories trying to stay warm and weighed less once they reached the slaughterhouse. Ranchers were also squeezed by high fuel and feed costs.

Then there's always the economy to blame, says Russell Woodward. He's the product marketing manager at the Texas Beef Council.

RUSSELL Woodward: As the weak dollar allows us to export more of those items, that means our products are cheaper in those markets -- so people will buy those versus other competing products, so that's picking up a little bit causing us to have a little bit less here than we might typically this time of year.

Ranchers and slaughterhouses are paying $100-200 more per cow. That leads to an extra 50 cents to a dollar per pound at grocery store.

Cattle consultant Leslie Callahan worries the high prices will entice ranchers to sell more females cows -- the heifers.

LESLIE Callahan: Well, what is the heifers? The heifer is the factory that you have to keep to make more cows, to make more calves.

Callahan says since 1996 the number of cattle in the U.S. has dropped by at least 30 percent. And with the higher prices that have followed, he says consumers are now choosing less expensive cuts of beef. Fortunately for those grilling hamburgers this weekend -- at least ground beef is cheap.

From Austin, I'm Erika Aguilar for Marketplace.