Drought And Disease Surge Food Prices To New Record

The United States is facing a serious shortage of beef and pork that has led to major increases in food process that likely will get only worse.

Beef prices have hit an all-time high in part because the California mega-drought has reduced cattle herds to the same size they were in 1951, The Los Angeles Times reported. The situation is made worse by fast-food giants such as McDonald’s which are buying up vast amounts of beef to turn into hamburger.

The California drought is the worst in recent history and perhaps the worst in centuries. The price of “all-fresh” USDA choice-grade beef is $5.28 a pound, compared to $4.91 the same time last year and $3.97 in 2008.

Suppliers of beef are more likely to save their beef for large companies such as McDonald’s who buy bulk at reduced rates. That leaves small restaurants and stores last in line – forcing them to raise their prices, too.

“This whole thing now is being driven by hamburger,” Jerry Haines, the general manager of R.C. Provision Inc., a Burbank, California, maker of deli meats, told the newspaper. He was forced to raise the prices on his menu. “You take all the McDonald’s and Burger Kings across the United States; the amount of meat needed to make those hamburgers is forcing the value of other cuts of meat to go up.”

Beef Prices Rising Dramatically

The LA Times articles featured some very disturbing statistics about America’s beef supply. Data uncovered by the Times included:

• There are now 87.7 million cattle in the United States. In 1975 there were 132 million. In 1951 there were 82.1 million.
• Norm Langer, the owner of a popular deli in Los Angeles, saw his wholesale food prices increase by 45 percent in two years. The deli owner said beef was the reason for that.
• The cost of beef brisket has tripled since 2008.

The situation is not going to get better anytime soon according to Richard Vogel, an economist for the United States Department of Agriculture (USDA).

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“We’re dealing with chronically low herds,” Vogel said. “Beef prices should remain at near-record highs this year and into 2015.”

Beef prices are going to stay high because it takes two years for a calf to grow up, Vogel noted.

The drought is forcing some ranchers to sell off entire herds just to pay the bills. Some California ranchers have even had to sell their breeding cows, which essentially drives them out of business.

Mysterious Virus Killing Off The Hogs

Those who reach for pork chops instead of steaks won’t find much price relief, though. The Associated Press reported that a mysterious disease called porcine epidemic diarrhea or PED is killing off tens of thousands of hogs.

Pork production could decline by 7 percent nationwide and pork prices could increase by 10 percent by summer because of the diarrhea. Consumers are already beginning to feel the effect in the meat section.

The price of a pound of pork bacon increased by 13 percent or 70 cents between February 2013 and February 2014, figures from the US Bureau of Labor Statistics indicate. Bacon cost $4.76 a pound in February 2013 and $5.46 a pound in February 2014.

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Between 2.7 and 6 million pigs in 27 states have been killed by porcine epidemic diarrhea, the AP reported. In November 2013, 13,000 hogs died in less than two weeks at one farm in Iowa.

“It’s very difficult for the people who are working the barns at that point,” the farm’s owner, Craig Rowles, told the Associated Press. “No one wants to go to work today and think about making the decision of baby pigs that need to be humanely euthanized because they can’t get up anymore. Those are very hard days.”

There is no vaccine or cure for PED, which is not believed to affect human beings. Scientists think the virus originated in China and it has spread to hog farms in Canada and Mexico as well as the United States.

The virus is creating a hog shortage that could last for more than a year, economist Steve Meyer said. Meyer also had a very stark warning for American consumers.

“We’re all used to: `We’ve got plenty of food, it’s cheap. We’ll eat what we want to,’” Meyer said. “We Americans are very spoiled by that, but this is one of those times that we’re going to find out that when one of these things hits, it costs us a lot of money.”

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