Mad cow boosts beef prices

Don't blame higher beef prices on the Atkins diet.

This year's boost in beef prices — which are are up 11 percent for all beef in October compared to the same month last year — are a direct result of the closure of the U.S. border to Canadian beef imports due to mad cow disease, according to DeeVon Bailey, a Utah State University economics professor.

Choice beef prices are up even more, a whopping 21 percent in October compared to last year.

"That is an unusually large increase," Bailey said. "Typically during the fall you would expect a drop in beef prices because beef supplies are larger in the fall than they are in the winter or spring. We haven't seen that this year."

Beef prices for November are expected to be released later this month.

In May, the United States stopped Canadian beef imports, which account for roughly 8 percent of U.S. consumption.

The shortfall was made up by pulling U.S. cattle earlier from their feed lots. After a few months, cattle shortages grew severe.

"We were basically paying for today's beef with tomorrow's supply," Bailey said. "That is why supplies tightened so much during the last few weeks."

The Department of Agriculture has proposed new rules for allowing Canadian cattle back into the United States. Public comment is being accepted by the agency until the end of this year, and the border could reopen as early as January.

"Obviously the U.S. beef industry has really been the huge beneficiary of the result of the border being closed," Bailey said. "But I believe that many people would like to see the border opened again just to see some easing of beef prices."

Roy Moore, co-founder of Denver-based Maverick Ranch Natural Beef, a meat producer and packing company with products in 2,500 grocery stores nationwide, including Utah, said his company is actually seeing sagging profits.

"I think the windfall came to the American cattle feeder, but not to the packers," Moore said. "As a packer we have had a hard time struggling to hold our business and bring in the same amount of dollars of gross profit. We are paying almost double for live cattle what we were a year and a half ago, and our price increases are only probably 20 percent. The cattle producers, the ranchers, get the good prices because of it."

Bailey suggests that beef prices likely won't drop until early spring should the border reopen to Canadian beef in January.

As beef prices climb, Americans are turning to other meats. Moore said his company's pork sales are up. And Maverick has launched a new line of chicken products this year.

"Buffalo is selling better because buffalo is cheaper than beef," Moore said.

Despite the recent price spikes, today's beef prices are the lowest in years. In inflation-adjusted dollars, the retail price of all beef in 1982 was $2.63 per pound, Bailey said. The average price today of beef is $1.70 per pound in 1982 dollars.

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E-mail: danderton@desnews.com