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Why Meat Prices Are Going To Continue Soaring For The Foreseeable Future

Tyler Durden's picture




 

Submitted by Michael Snyder of The American Dream blog,

The average price of USDA choice-grade beef has soared to $5.28 a pound, and the average price of a pound of bacon has skyrocketed to $5.46.  Unfortunately for those that like to eat meat, this is just the beginning of the price increases.  Due to an absolutely crippling drought that won’t let go of the western half of the country, the total size of the U.S. cattle herd has shrunk for seven years in a row, and it is now the smallest that is has been since 1951.  But back in 1951, we had less than half the number of mouths to feed.  And a devastating pig virus that has never been seen in the United States before has already killed up to 6 million pigs in this country and continues to spread like wildfire.  What all of this means is that the supply of meat is going to be tight for the foreseeable future even as demand for meat continues to go up.  This is going to result in much higher prices, and so food is going to put a much larger dent in American family budgets in the months and years to come.

One year ago, the average price of USDA choice-grade beef was $4.91.  Now it is up to $5.28, and the Los Angeles Times says that we should not expect prices to come down “any time soon”…

Come grilling season, expect your sirloin steak to come with a hearty side of sticker shock.

 

Beef prices have reached all-time highs in the U.S. and aren’t expected to come down any time soon.

 

Extreme weather has thinned the nation’s beef cattle herds to levels last seen in 1951, when there were about half as many mouths to feed in America.

 

We’ve seen strong prices before but nothing this extreme,” said Dennis Smith, a commodities broker for Archer Financial Services in Chicago. This is really new territory.

The outlook for pork is even worse.  The price of bacon is 13 percent higher than it was a year ago, and porcine epidemic diarrhea is absolutely devastating the U.S. pig population

A virus never before seen in the U.S. has killed millions of baby pigs in less than a year, and with little known about how it spreads or how to stop it, it’s threatening pork production and pushing up prices by 10 percent or more.

 

Scientists think porcine epidemic diarrhea, which does not infect humans or other animals, came from China, but they don’t know how it got into the country or spread to 27 states since last May.

It is estimated that up to 6 million pigs may have died already, and it is being projected that U.S. pork production could be down by 7 percent this year.  That would be the largest decline in more than 30 years.

But even if someone brought an end to this pig virus tomorrow, we would still be facing a very serious food crisis in this nation.

The reason for this is the multi-year drought which is crippling farming and ranching in much of the western half of the country.

As you can see from the latest U.S. Drought Monitor update, the drought shows no signs of letting up…

Drought Monitor April 1

Hopefully this drought will end soon.

But I wouldn’t count on it.

In fact, CBS News recently interviewed one scientist that says that the state of California could potentially be facing “a century-long megadrought“…

Scientist Lynn Ingram, author of “The West without Water: What Past Floods, Droughts, and Other Climatic Clues Tell Us about Tomorrow,” uses sediment cores inside tubes to study the history of drought in the West.

 

“We’ve taken this record back about 3,000 years,” Ingram says.

 

That record shows California is in one of its driest periods since 1580.

 

While a three-to-five-year drought is often thought of as being a long drought, Ingram says history shows they can be much longer.

 

If we go back several thousand years, we’ve seen that droughts can last over a decade, and in some cases, they can last over a century,” she says.

So what will we do if this drought just keeps going and going and going?

As the article quoted above noted, last century was far wetter than usual.  During that time, we built teeming cities in the desert and we farmed vast areas that are usually bone dry…

Scientists say their research shows the 20th century was one of the wettest centuries in the past 1,300 years. During that time, we built massive dams and rerouted rivers. We used abundant water to build major cities and create a $45 billion agriculture industry in a place that used to be a desert.

So what happens if the western half of the country returns to “normal”?

What will we do then?

Meanwhile, drought is devastating many other very important agricultural areas around the world as well.  For example, the horrible drought in Brazil could soon send the price of coffee through the roof

Coffee futures prices are up more than 75 percent this year due to a lack of appreciable rain in the coffee growing region of eastern Brazil during January and February, which are critical months for plant development, according to the International Coffee Organization, a London-based trade group.

At this point, 142 Brazilian cities are rationing water, and it wouldn’t just be coffee that would be affected by this drought.  As a recent RT article explained, Brazil is one of the leading exporters in a number of key agricultural categories…

Over 140 Brazilian cities have been pushed to ration water during the worst drought on record, according to a survey conducted by the country’s leading newspaper. Some neighborhoods only receive water once every three days.

 

Water is being rationed to nearly 6 million people living in a total of 142 cities across 11 states in Brazil, the world’s leading exporter of soybeans, coffee, orange juice, sugar and beef. Water supply companies told the Folha de S. Paulo newspaper that the country’s reservoirs, rivers and streams are the driest they have been in 20 years. A record heat wave could raise energy prices and damage crops.

 

Some neighborhoods in the city of Itu in Sao Paulo state (which accounts for one-quarter of Brazil’s population and one-third of its GDP), only receive water once every three days, for a total of 13 hours.

Most people just assume that we will always have massive quantities of cheap, affordable food in our supermarkets.

But just because that has been the case for as long as most of us can remember, that does not mean that it will always be true.

Times are changing, and food prices are already starting to move upward aggressively.

Yes, let us hope for the best, but let us also prepare for the worst.

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Thu, 04/10/2014 - 21:19 | 4645836 syntaxterror
syntaxterror's picture

Inflation still stays at 1.000% regardless of how much it costs to live, so still bullish.

Thu, 04/10/2014 - 21:24 | 4645851 cifo
cifo's picture

Luckily, I'm a vegetarian :)

Thu, 04/10/2014 - 21:25 | 4645859 NoDebt
NoDebt's picture

My condolances.

Thu, 04/10/2014 - 21:34 | 4645889 dow jones 20000
dow jones 20000's picture

I just got hired as a wildland firefighter in Northern Ontario for the summer but considering we still have 4 feet of snow we won't be too busy up there.

Good thing you Yankees fly us down to help you put your forest/wildland/brush fires out. Looks like business is gonna be goooood. 

Thu, 04/10/2014 - 21:38 | 4645902 JoeSexPack
JoeSexPack's picture

I was a vegetarian once...

 

longest day of my life.

Thu, 04/10/2014 - 21:44 | 4645927 Miffed Microbio...
Miffed Microbiologist's picture

I'm a vegan that eats meat. That always goes over better than carnivore for some reason.

Miffed;-)

Thu, 04/10/2014 - 21:51 | 4645951 krispkritter
krispkritter's picture

Carnivegan...or 'She don't eat meat but she sure likes the bone...'

Thu, 04/10/2014 - 22:00 | 4645984 Rusty Shorts
Rusty Shorts's picture

I'm a Vaginatarian...btw

Thu, 04/10/2014 - 23:24 | 4646236 mophead
mophead's picture

"And a devastating pig virus that has never been seen in the United States before has already killed up to 6 million pigs in this country and continues to spread like wildfire."

BULL-FUCKING-SHIT - THERE IS NO PIG VIRUS - TOTAL HOAX - THESE PIGS ARE BEING KILLED ONLY BECAUSE THEY'RE PRESUMED TO CARRY THE VIRUS - GUESS WHO DECIDES IF THEY'RE CARRYING THE VIRUS? NOT THE FARMERS OF COURSE.

ONCE AGAIN, THIS IS HOW THEY INFLATE: IT'S CALLED ARTIFICIAL SCARCITY

 

Fri, 04/11/2014 - 04:04 | 4646563 RafterManFMJ
RafterManFMJ's picture

I'm to the point now where I can sniff out a Snyder article just by the title; not denigrating the man but perhaps he could switch from his incessant drumbeat of doom, falling like a continuous unrelenting hail on a tin roof, to an upbeat story once in a while.

Something like, "17 Reasons Puppies Are Cool."

Fri, 04/11/2014 - 16:35 | 4648920 Rafferty
Rafferty's picture

Snyder's approach/ "x Reasons Why........" is inherently invalid because it's always possiblle to select a number of facts to support any case.  For example I could do a piece entitled "17 facts that show a major recession is due' and just as, well almost as easily do one claiming '17 facts why no major recession is due'. 

 

Like Rafterman I too can tell it's MS by the heading alone.

Fri, 04/11/2014 - 20:40 | 4649667 MeelionDollerBogus
MeelionDollerBogus's picture

Since a major recession has been in effect since 2007 and layered on top of the major recession of 2001 which never went away, there'd be precisely ZERO facts available to counter that claim and prove unreality.

Fri, 04/11/2014 - 10:18 | 4647299 Theosebes Goodfellow
Theosebes Goodfellow's picture

~"I'm a Vaginatarian...btw"~

Hey, who's to knock it? I'll admit I dine at the "Y" on occasion. 

Thu, 04/10/2014 - 21:53 | 4645954 Stackers
Stackers's picture

Meanwhile in totally related news the government just seized 600,000 acres to save an "endangered" tortoise, while terrorizing a rancher trying to stand up for his rights.

https://www.google.com/search?q=cliven+buddy+ranch&ie=utf-8&oe=utf-8&aq=...

Thu, 04/10/2014 - 21:56 | 4645967 krispkritter
krispkritter's picture

I say we all go and eat the fucking turtles.  Problem solved. 

Thu, 04/10/2014 - 22:04 | 4645989 Rusty Shorts
Rusty Shorts's picture

Turtle - another white meat

Thu, 04/10/2014 - 22:32 | 4646072 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Mmmmmmm, tastes like chicken.

Fri, 04/11/2014 - 00:17 | 4646345 Four chan
Four chan's picture

bat, chicken of the cave.

Thu, 04/10/2014 - 22:57 | 4646154 TheMeatTrapper
TheMeatTrapper's picture

Snappers are an excellent source of meat. They are widely available and easy to catch. Snappers have both red and white meat. The white meat is very similar to lobster while the red sections are like beef. 

Learn To Trap

Here's a few snappers from one trap in one pnd last year. I'll be starting turtle trapping this weekend as the temps are back in the 80's now. 

There is hunger in America because there is lazy in America

Fri, 04/11/2014 - 00:06 | 4646316 bigrooster
bigrooster's picture

Man I am going to place some of those beaver traps around my local bars!

Thu, 04/10/2014 - 21:59 | 4645977 greatbeard
greatbeard's picture

>> stand up for his rights.

He has a right to graze his cattle on federal lands for free?  Fuck the cows and the shit kicker.

Thu, 04/10/2014 - 22:11 | 4646017 fonzannoon
fonzannoon's picture

I have not followed this story closely enough to have an opinion. Interesting to see someone take the fed's side. Especially a grizzly veteran with a great beard. I am interested to see where this goes.

Thu, 04/10/2014 - 22:15 | 4646031 tip e. canoe
tip e. canoe's picture

“No cow justifies the atmosphere of intimidation which currently exists nor the limitation of constitutional rights that are sacred to all Nevadans,"

You Didn't Graze That.

Fri, 04/11/2014 - 01:02 | 4646416 Serenity Now
Serenity Now's picture

fonz,

My understanding is that he has been illegally letting his cattle graze on land that does not belong to him.  I don't think he has any rights on that score.  However, I also understand that the government is seizing his cattle for auction.  I do think he has rights in that regard, as the cattle are his property.  

Why this is being settled ala a Waco standoff and not in a court of law (where rights, property and otherwise, should be adjudicated) is beyond me.

Fri, 04/11/2014 - 02:17 | 4646474 zhandax
zhandax's picture

If what I read tonight is correct, and I do not make that assumption, BLM pulled his permit, he appealed, and the appeal court automatically sides with BLM.  Bogus from a fairness perspective, but within the letter of the law.  I agree with the governor's statement that he is offended by (paraphrasing) the Waco tactics used by BLM.  This is one of those messy examples of why things are so fucked up in an oligarchy.  And no doubt there is more to this story than any media outlet will publish.

Fri, 04/11/2014 - 03:41 | 4646550 Serenity Now
Serenity Now's picture

I didn't know that about the permit and that he lost an appeal.  I know nobody wants to hear this, but one of the few legitimate functions of government is to protect property rights.  If it's not his property, then he doesn't have property rights.  

As I said in another comment, this is a great example of elections having consequences.  The BLM is under the Department of the Interior, which works directly for the Executive.  If we are going to let the feds run anything and everything, then we will all be at the mercy of whoever happens to be in the White House.

Fri, 04/11/2014 - 10:07 | 4647238 fedupwhiteguy
fedupwhiteguy's picture

I read that he's been grazing on that land before the BLM even existed. This is a fight for states rights over the dictates of the executive branch. But i agree, that the MSM is not covering this and we have yet to get the full story. But, heaven forbid if this turns into another Ruby Ridge and we once again choose not to once and for all STOP the federal governments mission creep into our lives.

Thu, 04/10/2014 - 22:11 | 4646019 tip e. canoe
tip e. canoe's picture

joel salatin for BLS commish

one can dream, no?

Thu, 04/10/2014 - 22:57 | 4646159 MeelionDollerBogus
MeelionDollerBogus's picture

Who paid for the federal land? Is the grass there & going to waste when it could be productively feeding cattle? Cattle = milk + meat + leather which is a sustainable way (natural) to make various items of boots, shows, handles for tools. So long as you can raise more cattle you can get more leather & that's a bit nicer than burning oil & other processing to get fake leather.

Thu, 04/10/2014 - 23:48 | 4646283 donsluck
donsluck's picture

Do your research. Cattle grazing through much of the west is turning a natural semi-arid region into dessert. That grain "going to waste" does not grow fast enough to make up for cattle grazing, or horses for that matter. Are you really willing to allow species to go extinct to guarantee a profit for private business operating on PUBLIC land?

Fri, 04/11/2014 - 02:14 | 4646484 zhandax
zhandax's picture

"Who paid for the federal land?"

For this particular land, the pre- Civil War taxpayers paid for the bullets and blood to take it from the Second Federal Republic of Mexico.

Fri, 04/11/2014 - 02:40 | 4646512 MeelionDollerBogus
MeelionDollerBogus's picture

Thank you. SO that being the case no Natives have a claim on it, the Federal Government has no claim on it and the state of Nevada has legal precedence over it, above the US Federal government, is that correct?

It may not be how things play out because the US Feds are mafia murderers (Ruby Ridge, Waco), executioners with a joy for killing children and stealing property, but legally, have I figured this out yet?
I'm Canadian, American laws vary so much over time & state to state, Federal vs state, I'm not sure how this all is written out. I'm fairly certain I know how it will play out regardless of the 'law', though.

Fri, 04/11/2014 - 02:57 | 4646525 zhandax
zhandax's picture

Here are more specifics on how much of the west became US territory.  I am not quite as well versed on how it became 'federal land', but suspect that land is what was not granted by homestead.

http://www.tennesseehistory.com/archive/volpg.html

 

Fri, 04/11/2014 - 02:38 | 4646510 MeelionDollerBogus
MeelionDollerBogus's picture

600 acres per head of cattle for Cliven Bundy. Looks like he couldn't overgraze it if he tried and he's not.

The land isn't being used for anything else and that tortoise has no interference PLUS it appears if the 'fees' are paid to the Federal government to use NEVADA state land (not Federal!) then suddenly no one cares about the tortoise, it's all good then.

Sound suspicious to you?

How's that for research.

Species will go extinct no matter what we do but in this case there is precisely zero danger of that.

Fri, 04/11/2014 - 11:16 | 4647538 Miffed Microbio...
Miffed Microbiologist's picture

Wrong donsluck. Grazing animals are not the problem.

Allan Savory explains :

www.youtube.com/watch?v=vpTHi7O66pI

Miffed;-)

Sat, 04/12/2014 - 03:54 | 4650458 338
338's picture

Oh you poor, dumb bastard.

 

How is it the 'feds' own that land?

 

What a sorry excuse for a country we have when we actually have people that think over half the land in the western US is 'owned' by the feds.

 

When I was a kid, the BLM were fixing fences, not building fucking wanna be swat teams and driving 70 thousand dollar pickup trucks.

 

Who in this fucking country would allow their children to play with the children of these sorry fucks or allow them in their churches is beyond me anymore.

 

 

Thu, 04/10/2014 - 22:13 | 4646025 yabyum
yabyum's picture

Clive Bundy is a low life douche.

Thu, 04/10/2014 - 22:18 | 4646034 tip e. canoe
tip e. canoe's picture

indeed, cattle welfare queen.

or does that mean my cows can graze on that land too?

Thu, 04/10/2014 - 23:01 | 4646173 TheMeatTrapper
TheMeatTrapper's picture

Yes, they can graze on public land.

There has been a long running, successfully administered program of permits that allow ranchers to graze their cattle on public land. It worked well until the Feds decided to protect turtles rather than our nations food supply. 

Thu, 04/10/2014 - 23:40 | 4646270 The Proletariat
The Proletariat's picture

yabyum,

His name is Cliven.  Bitch

Fri, 04/11/2014 - 00:40 | 4646381 Rusty Shorts
Rusty Shorts's picture

Tragedy of the commons 

Fri, 04/11/2014 - 06:34 | 4646617 tip e. canoe
tip e. canoe's picture

fair enough, should have investigated the story more before shooting my mouth off.  just sick of hearing about millionaire cattlemen making mucho dinero running roughshod over public land for generations and then crying about private property rights when the nipple is taken away.   i'll leave it an open question for now whether Bundy is or isn't one of those people.

found an interesting comment in the RT story:

"It is not about turtles it is about water. There are developers working for military contractors that want that land for water for mining weapons grade minerals for industry ... Many buyers sent me out there with crazy offers for that land for many years. It is prime real estate not worthless desert. There is a natural gas pipeline going through there and lots of water under ground too. Somebody connected to a military corporation is using political power and the BLM to muscle those people out." Rusty Hill FMR NV Land broker"

Fri, 04/11/2014 - 09:01 | 4646963 Agstacker
Agstacker's picture

Have you read anything about this?  The man hasn't paid his grazing permit since 1993, so for 21 years his cattle were on PUBLIC land, grazing for free.  If I moved there and tried to put some cattle I bought on the land he had his cattle on, you better believe he would be pissed off.  Even ranchers that do pay the fee it is truly welfare, $1.37 per animal unit per month.  So for this guy to have an animal unit (1 cow and her calf) on PUBLIC land he only has to pay $1.37 per month, and he didn't want to pay it.  

 

Some ranchers even consider it to be 'their land' if they have a federal grazing permit.  There was a man and his son a few years back in Montana who went to hunt deer on PUBLIC land, and the rancher who had the grazing permit called the sheriff and ran them off, claiming it was his land.  These big ranchers are nothing but welfare queens, I don't feel sorry for them one bit.

Fri, 04/11/2014 - 20:41 | 4649670 MeelionDollerBogus
MeelionDollerBogus's picture

Have you heard? Nevada didn't need to issue a grazing permit but it's not Nevada asking for it: it's the FEDERAL government.
They don't have the actual legal right to REQUIRE a grazing permit in defiance of the PEOPLE of Nevada.

Fri, 04/11/2014 - 21:13 | 4649763 Agstacker
Agstacker's picture

I hate to break this news to you, but there is a slight difference between state land and federal land.

Fri, 04/11/2014 - 23:03 | 4650077 MeelionDollerBogus
MeelionDollerBogus's picture

You're not breaking anything to me.

This land is not federal land so no federal permit is possible.

This land is Nevada state land and Nevada doesn't actually seem to want to stop the grazing.

Sat, 04/12/2014 - 13:22 | 4651307 tip e. canoe
tip e. canoe's picture

according to the 1995 amendment to The Ordinance, the whole issue seems rather sticky:

http://www.leg.state.nv.us/Statutes/68th/Stats1995R01.html#Stats1995R01p...

where the following was crossed out:  [they forever disclaim all right and title to the unappropriated public lands lying within said territory, and that the same shall be and remain at the sole and entire disposition of the United States; and that]

where's MachoMan with a legal opinion when you need him?

Sun, 04/13/2014 - 20:23 | 4655298 MeelionDollerBogus
MeelionDollerBogus's picture

crossed out? An unchallenged modification to a contract? Ruh-roh, raggy!

Fri, 04/11/2014 - 11:23 | 4647593 Miffed Microbio...
Miffed Microbiologist's picture

Meat Trapper, I'm doubtful the turtles really have a problem existing with cattle. Didn't they coexist with the millions of bison that roamed the prairies for a millennia? Something makes me feel those turtles are a front for a deeper issue and the ranchers are in the crosshairs of Sauran's Eye for something altogether different.

Miffed;-)

Thu, 04/10/2014 - 22:59 | 4646167 TheMeatTrapper
TheMeatTrapper's picture

No - YOU are a fucking lowlife douche. Clive Bundy is a man you son of a bitch. 

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