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Florida has Major Stake in Rising Beef Prices

June 9, 2014
NFREC Heifers
The Sunshine State will continue to play a key role in the record success of the beef industry.  
 
 

The Sunshine State will continue to play a key role in the record success of the beef industry.
By: Richard Mullins, The Tampa Tribune

Dennis Carlton slowly rolls his pickup through a herd of hundreds of mother and baby cows meandering in the midmorning sun around the Audubon Ranch property north of Plant City.

"Come on there, get up," Carlton gently calls out to a calf lying in the grass. "If they're lying down, they're not eating," he jokes. As far as the eye can see, there are open fields of grass and cattle pacing about. Cute as they may be, speaking strictly financially, each calf represents $600 to $700 on the market, roughly twice what it was just two years ago.

Being a seventh-generation Florida rancher gives Carlton quite a perspective on where beef prices are going, and he says burger and steak fans may just have to get used to paying more. "At least for the next two or three years; then we'll see where things stand."

Though Florida may be known for Disney and oranges, dozens of massive ranches make this state one of the largest cattle producers in the nation. One ranch alone, the Deseret Ranches in St. Cloud, stretches to 295,000 acres — roughly 20 times the size of Manhattan Island.

Times are good, lately, for those ranchers. Virtually every factor of the beef industry is pushing up prices: weather, shrinking herd sizes, corn prices, energy prices, growing foreign demand. In turn, the price of ground chuck at Publix stores in Tampa is $4.49 a pound, up 25 percent from last year and 50 percent from 2010, and a New York strip steak last week cost about $13.99 a pound when not on sale.

"A lot depends on the droughts, but there are a billion people moving into the middle class around the world, and given the choice between chicken and a steak, they're gonna pick the steak," Carlton says.

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Florida largely plays the role of the maternity ward for the U.S. beef industry. Three of the top five largest calf-producing ranches in the country are within 150 miles of Tampa, and the state overall has 1.7 million cattle when dairy cows are included.

From Florida, thousands of semi-trucks each season carry 8-month-old calves to massive feedlots in the Midwest and West where they grow on corn and other grains. As cattleman often say, it's easier to send the calf to the grain than the grain to the calf. The reason: pure math. A calf in Florida is subject to more heat and swampy sicknesses and will gain less weight by eating grass alone, compared with dry-climate lots in Texas or Oklahoma, said Wes Williamson, president of the Williamson Cattle Co. and president of the Florida Cattlemen's Association.

Once calves are sent West, market forces really begin to push up the final prices customers see in the beef cooler at the grocery store.

Severe Western droughts several years ago forced ranchers there to send cattle to market lest they die of hunger or thirst. That may have temporarily boosted supply and tamped down prices, but the move also shrank the overall herd size dramatically going into the next year. The U.S. cow-calf population fell from 96 million in 2007 to 89.9 million in 2012, according to federal statistics. Presently, the total cattle population in the United States has shrunk to levels not seen in 60 years, all while the human population in the U.S. has almost doubled.

Meanwhile, corn prices also doubled in some cases, pushing feed costs up further. Worse for beef fans, Williamson said: Some cattle ranchers found they could make more money faster by converting ranch land to crops such as corn, thus taking more land out of circulation for cattle.

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