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The reason behind the sticker shock of buying a ribeye lately

I’ve experienced two mild cases of sticker shock in the past six months.

First, the pickup truck cost less than what I had expected.

A couple of days ago I bought a ribeye steak. Dang. I think I pondered the steak price longer than the cost of the truck.

Like everyone else, I am aware COVID-19 temporarily shut down some beef processing plants about two months ago. And the market rule of supply and demand exists among feedlots and beef carcasses as much as anywhere. The prices of pork and chicken haven’t risen much, best I can tell.

The current virus dilemma aside, there are other reasons beef costs more than pork and chicken.

One reason is time. It takes about 20 months for a newborn calf to make it through the three stages of life as a market steer. The first seven months are spent with momma in the pasture. Then it’s off to a couple of grazing periods where the aim is to gain weight cheaply and get older before finishing up in a feedlot.

There, expenses go up as the animal eats mostly grain for about six months, give or take a couple. Ideally, a steer would be ready for slaughter at 18 months of age, weigh 1100 pounds and grade out at USDA Choice. But only half the cattle fed meet all of those ideals on schedule. So they keep eating, aging and costing.

Genetics and maturity are the two factors affecting the quality grade most. Obviously, the rations and the health program are of utmost importance, but those two can be standardized more so than the other two.

A second big cost determinant is feed conversion rate of feed to meat. On a live weight basis, it takes about seven pounds of feed for a steer to gain one pound in a feedlot. Compare that to a pig that only needs three pounds of feed for each pound gained. And a pig reaches slaughter size in less than six months of age.

Move from the beef to the pork to the chicken display at the store and feed conversion goes down with the retail price, or vice versa actually. Those thousands of birds in central and east Mississippi broiler houses put on a pound by eating two pounds of feed. Plus they are ready for plucking at 6-weeks-old. In addition to feed cost, the differences in annual turnover use of facilities among the animal species affect meat prices.

Strictly trivia: I miss pork bellies futures. During my college time and the years, I part-timed some cattle and hogs of my own, the Chicago Mercantile futures market was of interest to me.

It used to be that a trader could buy or sell live hogs and/or pork bellies contracts. Pork bellies were just that and frozen for later bacon. But times have changed. The only hog contracts now are for lean hogs, which are whole dressed hog carcasses. Pork bellies trading ceased in 2011. 


Terry Rector writes for the Warren County Soil and Water Conservation District. 


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