WHERE’S THE BEEF ???
And Some Other Stuff
Well, this was inspired by a comment on another Social Media platform by someone I have known for 60 years. Ground beef was $6,75 a pound, and had skyrocketed to that in just a year. Hinting that it was President Trump’s fault. If you cannot tell, he does not like President Trump, and we are friends despite our political differences.
There are many reasons for the high costs, and pointing a finger at one source, person, or reason is like……well does not hold water. So, I did a little digging, and was amazed at what is out there. So here goes.
One of the reasons for the high cost is that the supply of cattle to go to market and be slaughtered is down. Here is some informatuon:
Causes of the Beef Shortage
Decline in Cattle Herd
The U.S. cattle herd has shrunk to its lowest levels since the 1950s.
Factors contributing to this decline include:
Drought: Ongoing drought conditions have severely impacted pasture quality.
High Production Costs: Rising costs for feed, equipment, and other inputs have made cattle farming less profitable.
Market Incentives: Current market conditions favor selling cattle for slaughter rather than retaining them for breeding.
Economic Pressures
Ranchers are facing significant economic challenges, including:
Inflation: Increased costs for supplies and labor have squeezed profit margins.
Supply Chain Disruptions: Issues stemming from the COVID-19 pandemic have affected cattle availability and processing.
Slow Recovery Process
Rebuilding the cattle herd is a lengthy process:
It takes about 30 months for a heifer to produce a calf that contributes to herd growth.
Any increase in cattle numbers will not significantly impact beef supply until at least 2028.
Impact on Beef Prices
The combination of a reduced cattle supply and strong consumer demand has led to rising beef prices.
Beef prices have increased significantly, with ground beef and other cuts reaching record highs.
The beef shortage is a complex issue driven by environmental, economic, and market factors, and it will take time for the industry to recover.
So it seems that it has been going on for a few years, and it does take time. I know some folks in Texas, and their herd is down, and the main cause besides increased prices for feed, etc, is the drought. And the rancher makes little money on it.
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Then there is the complaint about only four meat processors in the US. True, there are four meat companies in the US, two of which are foreign-owned. A bit of history on that, which goes back to 1967 and the “Wholesome Meat Act.”
The Wholesome Meat Act has done tremendous damage to local slaughterhouse infrastructure around the country. In 1967, there were nearly 10,000 slaughterhouses in the country A; today, there are less than 3,000.
How much safer is our meat? Might be a problem as we have to import beef from South America, and the screw worm there. I have read of major ground beef recalls for one reason or another. Has the so-called safety measures impacted the quality of the end product? Questions we all should be asking.
Now the latest is the price of gasoline. Am sure that is on everyone’s mind at the moment. Not only does it impact everyday Americans trying to get back to work, but it also affects shipping, farming, heating, and electricity generation. (We have not gone all green yet).
And I am sure that many want to point the blame in one direction, if they had not bombed Iran, then it would not be going on. That discussion, my friends, is for another day. Yes, it is ugly, but again, there is more involved than just a few players. One that is not talked about is insurance rates for the tankers/and shippers.
Pre-conflict, the insurance premium baseline for the Hormuz was extremely low (0.25% of a ship’s total value). Today, those premiums have spiked from 2% to 10%. Major insurers, including P&I clubs like Gard, Skuld, NorthStandard and London P&I issued cancellation notices for war-risk coverage in the Persian Gulf area, effective in March. Reinsurers pulled back, forcing repricing. The costs are far too high and the risk outweighs the reward.
As I said, it does hurt, but a question that I have, is it as bad as it was in 1973? Yeah, yeah, I know many may not remember the oil crises of 1973/1974, much less alive. I was and I do. Here is what Forbes has to say about it.
I was at a post in Germany, and remember the “No Driving” ban on Sundays. Everyone dealt with it.
What I am saying is that there is more involved in it than one would think. There are no magic switches that can be flipped to make things better. I do not care what politicians say. Just stop, take a deep breath, and think for a minute.
As always, thanks for reading, and if you have any questions, please feel free to ask.
