Economics Drives Beef Into the Limelight

Summer is nearly here, and beef is in the air: or at least in the mainstream media. A cursory search of Google news earlier this week turned up eighteen different stories about beef posted within a twenty-four hour period, among them: South Korea Opens to US Beef Imports, Pampered Beef Cattle Generate a Niche Profit, United Food Group Recalls More Beef, and my favorite, Roast Beef Helps Restore £9m Church.

Why is beef on everybody's brain?

i-fdcac931b6de7cf5d9d6665e863fca26-iStock_000002883789XSmall.jpgAlthough beef production has levelled off in the U.S., global demand for beef continues to rise. According to the U.N.'s Food and Agriculture Organization (FAO), livestock farming comprises 1.4 percent of the GDP (global domestic product), and its contribution has grown by 2.2 percent per year over the last ten years. The FAO's recent report, Livestock's Long Shadow, offers some stunning statistics about global meat consumption, which ranges from 11 pounds per person per year in India to more than 270 pounds per per person per year in the U.S ! (If we factor in the roughly 6.7% of Americans who report that they "never eat meat", that means that meat-eating Americans are devouring more than three-quarters of a pound per day!)

But economics, and not grilling season, is what has really driven beef into the limelight. The price of slaughter beef in the U.S. market jumped to 98 cents a pound last month, over 83 cents a pound in April 2006. After slaughtering, transporting, and butchering, the cost of a well-trimmed steak might be 30% higher than last year, Bob Mark, director of sales for Buckhead Beef Northeast told The New York Times. Blame a harsh winter, rising fuel costs, and the incipient ethanol craze, which has driven up the price of corn for feed: "The cattle should be on feed 120 to 140 days," a Buckhead buyer told the Times, "but the cattlemen have been cutting it to 60 to 90 days." In general, it takes an older animal to develop the well-marbled "prime" cuts of beef that command premium prices in restaurants and grocery stores. Because fewer animals are being raised to maturity, consumers can expect to pay more for "prime" and "choice" cuts off the ones that are, and to see restaurants either raising their beef prices, or serving chewier meat.

You needn't harden your stomach to gristly stew beef just yet. The rising cost of steaks and burgers may be a boon to conventional beef's grass-fed cousin. Currently, grass-fed beef garners a 20 to 25% premium over the feedlot variety, and comprises less than 10% of America's retail grocery beef sales. (It also offers lower cholesterol and higher levels of heart-healthy Omega-3 fatty acids--as well as, by most accounts I've read, superior taste.) Since grass-fed beef doesn't depend on corn feed, or corn shortages, it's unclear how grass-fed beef will fare in the context of rising beef prices; will it parallel feedlot beef's 30% increase? Time will tell.

In the meantime, there just aren't enough well-marbled cuts to go around.

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