Rising Beef Prices Have Many Causes and Side Effects

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COLUMBIA - Beef prices are the highest they have been since 1987, causing the Columbia economy to be affected in multiple ways.

Patchwork Family Farms is composed of 15 independent family farms in Missouri and is a project of the Missouri Rural Crisis Center.

"Farmers are our members, and we deal with the issues they have to deal with day in and day out," Patchwork Communications Director Tim Gibbons said.

The price increase problem began in Missouri with the droughts in 2012, which caused feed prices to go up and number of cattle to go down.

"We have lost a lot of cattle operations in Missouri," Gibbons said. "Actually 40 percent of the cattle operations in Missouri, we've lost since 1985. Now they are working to rebuild their herds and bring more money back to their communities and families."

But as beef prices increase and animals dwindle, demand has started to overwhelm the supply - helping independent Missouri farmers start the rebuilding process for their herds.

"From a farmer perspective, from a farmer producer, from a cattle producer perspective, it looks like it's good times right now," Gibbons said.

From a consumer perspective, though, it's not exactly good times. According to the Bureau of Labor Statistics, the average price of a pound of ground beef was less than $3.30 during May, June and July of last year. So far in 2014, though, the average price increased to $3.55, reaching $3.70 in February.

Scott Cleeton is a cook for CC's City Broiler, a Columbia steakhouse, and has been impacted by the increase.

"We're always worried that maybe they're going to stretch this out as far as the public will handle and then any decrease is looked upon as a great thing but point in fact, it may never go back to where it was," Cleeton said.

Cleeton has been in the beef industry almost his whole life, as his dad was a beef buyer in California for more than 30 years. That knowledge helps Cleeton with another price prediction that could be right around the corner.

"You're going to see all your dairy, cheeses and milks and butters and everything that is a result of this will also increase," Cleeton said. "Poultry and eggs, specifically, will have a price increase as a result of the grain situation, so it's across the board."

Cleeton says he has noticed some Columbia restaurants taking the wrong approach in dealing with these increases.

"They cut quality, then they cut size and then they raise prices all congruent at the same time with each other and that doesn't work," Cleeton said.

He says adjusting portion size and labor hours is a more effective approach.

"We're doing double time now in the back and we're trying to cut non essential hours," Cleeton said. "I'd say being creative with some different things to sort of wait this out would be my advice."

Cleeton said experts in the industry believe the price increase will last about two years, then flatten out a little as farmers continue to rebuild their herds.