'Epic' Four-Year Texas Drought Prompts Record Beef Prices in US

By Michael Kuhne, AccuWeather.com Staff Writer
May 9, 2014; 4:42 AM ET
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Those looking to enjoy a sizzling sirloin steak and hamburgers cooked over an open flame this spring or summer may have to burn up a few more greenbacks at the register to do so.

Texas, the largest cattle-producing state in the United States, is facing its fourth year of drought, pushing beef prices to record highs. Beef and veal prices spiked by 1.9 percent in March and now sit at 7.4 percent over the same time last year, the U.S. Department of Agriculture (USDA) Economic Research Service reported.

In this March 17, 2014, photo, a cow walks with her newborn calf on Chuck O'Connor's Ranch near Philip, S.D. The highest beef prices in decades have some consumers spending extra time in meat market aisles as they search for cuts that wonÂ't break their budgets. (AP Photo/Toby Brusseau)

"The drought of 2011 was epic," Texas Farm Bureau Spokesman Gene Hall said. "It was a horrible time when there was virtually nothing left to feed the animals."

Wholesale beef prices have climbed by more than half since May 2009 from $1.49 per pound to $2.28, according to Texas Department of Agriculture Spokesman Bryan Black.

"Over that same period, the average retail value of Choice beef has increased 34 percent, from $4.25 to $5.72 per pound," Black said.

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Texas farmers and ranchers produced 6.3 billion pounds of beef in 2012 which contributed 15 percent of total beef production nationally, he said. In addition, Texas facilities processed 8.1 billion pounds of beef in 2012, 19 percent of the U.S. total.

Hall said the drought is the major contributing factor in the price increase.

"The drought has reduced the supply of cattle in Texas and across the nation," Black said. "On a positive note, we have seen an increase in demand for replacement cattle in areas that have recovered somewhat from drought, primarily in East Texas."

"It's a classic supply-and-demand situation," Hall said, adding that the demand for beef remains high and the supply of beef is dependent on the amount of rain that douses the state this year.

(Photo/High Plains Regional Climate Center)

AccuWeather.com Senior Meteorologist Dan Kottlowski said that many areas in the region have also been experiencing ongoing drought conditions for years, contributing to the reduction in the amount of feed available for the animals, including corn, which is used to feed some cattle.

"Many of the larger beef growing states have experienced drought," he said. "Statistically, the area including the western half of Texas to portions of central Texas have been in a drought for some time."

In Lubbock, Texas, for 2014, the area has received 22 percent of their normal rainfall for the year. In 2011, the area received 31 percent of the normal yearly rainfall, he said.

"Since January 2011, the total number of cattle and calves in Texas has declined by 2.4 million head to 10.9 million head," Black said. "Beef cow numbers have dropped 1.1 million head over the same period to 4.35 million head."

With the price of beef to remain at record highs for the foreseeable future due to the drought, the demand for beef has waned little, Hall said, but added higher prices may deter some consumers.

Tyson Foods reported double profit due to price increases of beef, according to Reuters.

"Chicken sales rose about 4 percent to $2.84 billion, even though the company reduced prices due to lower feed costs," the article reported.

In addition, national restaurant chain, Chipotle, is increasing the price for their beef entrees by 4 to 6 percent, the Huffington Post reported.

Hall said Texas cattlemen are a devoted group of individuals who understand prices need to come down in the future, but that will be dependent on rainfall. Black agreed with this notion.

"Texas ranchers are no strangers to drought, but the intensity of the last few years of drought has been devastating," Black said. "However, we are Texans and we don't give up, our ranchers are determined in their commitment and fierce in their resolve."

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