Beef Reaches U.S. Record as Rancher Sees More Gains

For a guy who just sold some of his cattle at the highest price ever, Missouri rancher Ryan Sharrock is showing less enthusiasm for beef. He says the meat is just too expensive and that the cost probably will keep rising. While he got more than $1,000 each for 23 calves sold at auction a couple of weeks ago, the 33-year-old Sharrock says he’s cut back on steak dinners for his family of five in Patton, Missouri, to less than one a week from three. “It’s not so much a cheap family meal anymore,” he said. U.S. ground-beef prices are up 76 percent since 2009 to the highest on record, after a seven-year decline in the herd left the fewest cattle in at least six decades, government data show. Meat costs are rising faster than any other food group, eroding profit margins at Hormel Foods Corp. (HRL) and forcing Costco Wholesale Corp. and Chipotle Mexican Grill Inc. to raise prices. Supply probably will remain tight. It can take three years to expand the herd, and a prolonged drought in Texas, the top producer, parched pastures needed to raise young animals. The government says the U.S. will become a net beef importer in 2015. Cattle futures already up 22 percent in the past year in Chicago may rally 8.3 percent to $1.578 a pound by the end of December, a Bloomberg survey of five analysts showed. “Beef’s a staple at this point, so at many points, it’s inelastic on price,” said Jake Dollarhide, the chief executive officer of Longbow Asset Management Co. in Tulsa, Oklahoma, which oversees about $75 million. “I don’t see consumer habits changing at these price levels.” After years of high feed costs and drought, the domestic herd on Jan. 1 slid to 87.7 million head, the fewest to start a year since 1951 and the seventh straight decline, U.S. Department of Agriculture data show...more