Higher operating costs for cattle ranchers trickle down to consumers

More expensive fertilizer, fewer cows being slaughtered, and a nationwide drought all driving up costs
Published: Aug. 22, 2022 at 6:39 PM CDT
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KILLEEN, Texas (KWTX) - Spending more at the grocery store nowadays is unavoidable.

The increase in everyday items now includes beef as distributors are facing tough decisions amid a nationwide drought.

The lack of rain coulcd be to blame for a multitude of tough decisions cattle ranchers are facing.

Now, those decisions are trickling down to the consumer level, leaving everyday people to pay the difference if they want their favorite steak dinner.

“This too shall pass. We’ll get through it,” said Jon Taggart with Burgundy Pasture Beef in Fort Worth.

Beef sales have seen a price increase of 7.5 percent since this time last year.

The price surge stems from high operation costs, lack of rain, and the diminishing number of cattle reaching the slaughterhouse.

Ranchers dealing with the increase in cost aren’t alone anymore as grocery stores are having to mark up beef prices because of supply issues.

“All of the prices have increased in all merchandise, especially, the meat has been affected, so we had to increase our prices,” said Walter Suarez with Delicias Meat Market in Killeen.

The local meat market increased its prices by a few dollars per pound for their various meats in order to keep up with the costs coming from distributors.

Experts say beef prices could soon reach a high only seen during the pandemic in 2020.

That means that a filet mignon that costs $14 per pound will soon cost $18 per pound.

The reason for that being the cost of cow maintenance has risen drastically causing ranchers to sell their cows to breeders rather than keep them for meat distribution.

“Those females are bought as breeding stock so they’re taking out of it which a portion of that would’ve gone into the beef chain,” said Taggart.

Along with selling cows to reduce maintenance costs, the lack of rain is causing ranchers to supplement natural pasture growth with expensive fertilizers, snowballing into a higher consumer price for that cut of beef tips.

Despite the rising price of beef, Suarez said his meat market has actually experienced an increase in sales citing that it’s the quality that the customer cares about rather than price.

“We, hopefully, will see more sales. But, obviously, prices have been affecting customers but they’re still willing to pay for the quality,” said Suarez.

Heading into the future, beef prices could rise again before the month is over.

Meat distributors say the nationwide droughts and heightened operating costs could keep supplies tight for at least a couple years.