Beef Prices Expected to Climb Over Next 2 Years

Smaller herds, drought to blame

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    NEWSLETTERS

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    Cattle use a tree for shade as temperatures rose above 100 degrees in a pasture July 28, 2011 near Canadian, Texas. A severe drought has caused shortages of grass, hay and water, in much of the state, forcing ranchers to thin their herds or risk losing their cattle to the drought.

    Beef prices at the supermarket likely will rise for the next two years because of the smallest cattle herd in 60 years.

    Experts say retail prices for beef could climb as much as 10 percent a year in 2012 and 2013, and the increase could be even greater if demand from other countries increases.

    Prices might drop in later years, but that also will depend on demand that is expected to grow and could keep prices high.

    Ranchers have sold more of their cattle in recent years to meet increased costs for feed, fuel and other expenses.

    The situation has been worst in Texas and nearby states, where a drought caused pastures to wither. That left ranchers with few options but to sell their cattle or pay top-dollar for feed.