Effects of drought, disease drive meat prices up
DeKALB – It might cost you a little more to host a barbecue this summer.
Pork prices have risen following after an outbreak of porcine epidemic diarrhea (PED) virus in the past year, while beef prices are up after a cattle sell-off that came after drought conditions drove up grain prices.
“Everything that’s happened in the last year and a half is hitting the stores now,” said Ken Beever, secretary of the DeKalb-Kane County Cattlemen’s Association, which is an affiliate of the Illinois Beef Association.
The price consumers pay in the Midwest for ground beef was up 11.8 percent in April over the previous year and 4.4 percent over the previous month, according to the Bureau of Labor Statistics. The price of a round, boneless, USDA Choice steak was up 17.8 percent year-over-year in April, the bureau reported.
With beef and pork prices on the rise, Tom Inboden, owner of Inboden’s Meat Market at 1106 N. First St., is seeing the changes reflected in his store.
“We knew it was coming, but we didn’t know it was going to be this bad,” Inboden said. “But we can’t be quick to charge higher prices, because that might chase people away. There are a lot of people trying to get back on their feet right now. It’s not a good time to raise prices on people.”
Inboden is able to use commercial business and catering to offset smaller profit margins in his retail business, he said. Local farmers are seeing different effects that might not be easy to combat, but they are using different tactics to make up for losses.
The PED virus outbreak, which is believed to have originated in China and poses the most risk to piglets, has led to larger pigs being marketed. Mike Woltmann, general manager of Illini Farms in Kingston, said grain prices are considerably lower than they were last year, and farms can afford to feed the animals more. The heavier weight per pig is an effort to make up for the many pigs that were lost to the virus, most of which were piglets, Woltmann said.
“The average weight of a pig being marketed is heavier this year,” Woltmann said. “We’re setting record highs for pig weights this year.”
Woltmann said about half of DeKalb County hog farms were affected by the virus, in some cases losing an entire month’s worth of pork production. He said because local pork producers are clustered together in the county, the virus was able to easily move throughout. He said effects were significant in the area because DeKalb County has more than 230,000 pigs, making it No. 2 in the state for pork production numbers.
“Those [farmers who] don’t experience the virus will see record high profit,” Woltmann said. “They will have the ability to expand and grow.”
Woltmann said while pigs are slow to turn over in numbers after something like a virus affects the stock, he said beef is even slower.
Beever said at his farm in Maple Park, he’s learned that playing the markets and networking are the best ways to bounce back.
“We’re networking with other producers, seeing what prices they are getting in other places, like Nebraska,” Beever said. “The weather played a big factor.”
A major drought about a year and a half ago meant many cattle farmers sold off their animals, unable to feed them. The shortage of meat following that is now trickling down to the stores, Beever said.
“Right now, it’s impacting the consumer rather than the producers,” he said.
At the store, retailers are seeing the effects as well. Inboden has spent time analyzing profit/loss margins and competition to deal with the rising cost of meat.
“When this happens, we are fortunate that we’ve built a niche,” Inboden said. “About 70 percent of our customers are 52-weeks-a-year customers. Our customers may be economizing somewhere else.”
Inboden said although food prices can fluctuate in cycles, he tries to keep his prices as surprise-free as possible.
“We just have to bite the bullet for a while,” Inboden said. “Things will go back and be affordable.”