The looming meat “cliff”….

…and we could be falling off that, too.

Kit Pharo linked to the drought monitor today and it demonstrates that while the drought over much of the country is forgotten….it certainly isn’t gone!

http://droughtmonitor.unl.edu/12_week.gif

The drought has forced many ranchers we know in the Midwest and West to cut back their herds or even close down completely.  The increased number of cattle going to slaughter earlier in the year has kept cattle prices fairly low, despite the high cost of corn.  But now the overall national herd is at record low numbers and demand has been forcing cattle prices (and beef) to rise.

But the worst is yet to come.  Eventually the drought will end and those high prices are going to bring not only a lot of farmers, but speculators, back into the market looking for cattle.  That, inevitably, will force beef prices even higher.

An advantage to natural, grass fed cattle farming is that we’re somewhat insulated from all the “ups and downs” of the marketplace.  We are affected by energy prices, of course, because our tractors need diesel but that’s a very small cost.  However, the price of hay, which is our major expense, is very sensitive to production costs.  And our second major expense, beef processing, reacts to the overall economy.

You can be sure we’re doing all we can to find ways of holding down our costs.  A major break-through a few months ago was finding a much lower source of Tamworth piglets.  On the other hand, much of that was offset by a jump in curing costs.  On the whole, Thistle Hill has been able to avoid the kind of escalating prices we’ve seen at supermarkets and restaurants.  We’re determined to produce not only the best beef you can buy but also at the most reasonable price.