WAYNE TWP., Butler County — One local cattle farmer described the expected increase in beef prices this year as much like the stock market.
“When you are selling, that brings more money in,” said Gary Gerber, 42, who operates an 1,800-acre farm and approximately 600 head of cattle with his 74-year-old father Jerry in Butler County’s Wayne Twp. “But when you go to replace those costs, it’s more expensive. So essentially you’re just trading dollars.”
A recent report from the U.S. Department of Agriculture indicates the 2012 cattle supply will be the smallest since 1952, which, in turn, will drive up beef prices for a second straight year. Beef prices are expected to increase between 4 percent to
5 percent.
“There are a whole lot more people now and the demand for beef is higher than it’s ever been,” said Greg Meyer, an Ohio State University Extension Educator in Warren County.
“But we’re not all of a sudden going to magically make more cows, so it means for at least the foreseeable future we can expect to pay more for hamburgers and steaks.”
The USDA report said there were about 91 million head of cattle in the U.S on Jan. 1, which is down 2 percent from a year ago and at its lowest level since 1952.
“Everything runs in cycles and the ag industry is at the top of the cycle right now,” Gary Gerber said. “Feed costs have gone up the last two or three years. Grain and everything is historically high, but I look for it to trend down in the next year or year and a half. It’s just a gut feeling.”
Meyer agreed.
“Eventually, it will trend back down,” he said. “That’s the way markets work, but it is going to take a while to fix this cycle.”
In January 2011, the USDA projected the reduced beef production to last through this year, and then rise from about 31 million at the beginning of 2011 to more than 34 million by 2020.
“We raise a small number here compared to other parts of the country, but it still effects us,” he said.
Jerry Gerber said they have approximately $750,000 in cattle on the farm.
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