Follow the money: The beef with US beef
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What is the main topic discussed in this episode?
This BBC podcast is supported by ads outside the UK. I've been thinking about fish luck. What about it? How you're so good at catching fish. Even though we have the same gear and the same rules, and the boat is going in the same direction, as soon as these fish bite me. And not the other way around. How do you know who's in the other direction? Am I so obvious? Don't think too much. Easier said than done.
Motonet.
Motonet. Motonet.
Somewhere in America tonight, someone's cooking burgers in the backyard. And whoever it is has probably noticed something. The beef cost more. A lot more. Beef and veal prices in America are up almost 13% on a year ago, stakes up nearly 15%. Overall, inflation isn't even a third of that. I'm Sam Fenwick and welcome to the documentary on the BBC World Service. Today we're following the money from the rancher to the restaurant and the grocery store. Why are prices so high and who's actually making money out of what you eat?
Pick up three things from a US meat counter this week. A pack of mince, a steak and a burger. All three cost much more than they did a year ago. And behind every one of them is the same chain. And it starts with a cow. Now, there are fewer cows in America right now than at almost any point in living memory. Because what you're seeing at the meat counter is really the end of a much longer chain. There are four links, the rancher, the feedlot, that's basically a giant cattle fattening yard, the meatpacker and the restaurant that finally puts the burger on your plate. And we're going to follow the money through all four and find out who's actually getting richer and who's getting squeezed. Eric Groper is a fourth-generation cattle rancher in southwest South Dakota, a Native American who leases his land from the Oglala Sioux tribe.
His farm is remote, two and a half hours drive in each direction to the closest towns. He sells his calves once a year at a local sale barn.
As a cattle rancher, you are a price taker. You get what's given, right? I don't get to set my price. I sell at a local sale barn. My calves are open to the world, we'll say. Anybody can bid on them. And that's what I get. Once a year, that's my calf crop.
Just give us an idea of what the price is that you're getting.
It's a rough figure, but about $2,500 a head for a 600-pound steer at the sale barn right now.
$2,500?
Yep. We're record cattle prices right now. The year before that, they were $18,000 to $2,000.
So for once, it seems like the rancher might be holding the cards. The US cattle herd stood at 86.2 million head at the start of this year, the smallest since 1951. And fewer cows means higher prices because there's a short supply and therefore people are willing to pay more for them. So is Eric better off?
Yes and no. I mean, it feels really good. You're able to pay your bills. But your inputs are still so drastically high that if we didn't have these record prices, we'd all be broke.
Why have US beef and veal prices risen nearly 13–15% in the past year?
So I sit down to do my taxes, and it feels like I made a lot more money, right? I'm playing with a lot more money. But in the end, I really didn't make any more. Because... Pickup trucks. I have to have them. They're essential to my operation. They cost $80,000 to $100,000 for a new one now, where they used to be $30,000 to $40,000. A roll of barbed wire. It's went from $60 for a quarter mile roll to $130.
Even though Eric's running costs have risen, the price he's getting for his cows has gone up by a lot. And that's because of shrinking cow herds. But how has that happened? Well, producer Gideon Long is here and he's going to explain.
Yeah, Sam, so this is partly to do with the cattle cycle. So roughly every 8 to 10 years, the herd builds up as ranchers keep cows for breeding. And then it declines again, and then it builds again. But it's been exacerbated in the last couple of years by drought. Well over 60% of the cattle in the US are now grazing on land which has been impacted by drought. And what does that mean? It means that ranchers have to buy feed instead, and that makes it much more expensive.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:00–3:55
2
Why have US beef and veal prices risen nearly 13–15% in the past year?
3:55–7:26
3
How is the US beef supply chain structured from ranch to restaurant?
7:26–10:12
4
What is a rancher’s experience of prices and rising input costs?
10:12–14:37
5
Why has the US cattle herd shrunk to its smallest size since 1951?
14:37–21:55