Beef - it's what's for dinner, again

According to a Washington Post article, the Atkins Diet is one reason that beef prices are up recently.

"That Atkins diet has really helped demand for beef," said Bill Garrison, 62, who, along with his two sons, raises cattle on 18,000 acres north of Dillon. He is also the immediate past president of the Montana Stockgrowers Association. "Prices are higher now than I thought I would ever see."

Another reason for higher prices the article mentions is a ban on imports of Canadian cattle. The cynical part of me wonders how long before there are calls for price controls.

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Jonathon - According to this

Jonathon -

According to this article, http://www.statcan.ca/Daily/English/031105/d031105a.htm , 90% of Canada's beef, prior to mad cow, was imported into the U.S., some 3.7 billion dollars worth. I haven't done any further analysis on this, but I wonder if attributing the rise of U.S. beef prices to the Atkins or South Beach diets is simply a warm fuzzy. The article I mention also states that the U.S. did not increase beef imports from any other country to cover the loss of Canadian beef imports.

Cattle prices are cyclical.

Cattle prices are cyclical. It takess two to three years to respond to an up market and increase supply. It takes time to grow a heifer to maturity instead of beefing her, time to gestate a calf for 9 months, and time to raise that calf and beef it. Too many respond to the signal which creates a glut and prices fall. Timing this market is as hard as any other but better cattlemen manage.

Canadian beef imports are 1% or 2% of US consumption. This can affect prices some but it's no where near as important to the US as it is to Canada. Since NAFTA Canada and Mexico sell more to the US but they just stole share from other exporters, especially Australia.

Beef consumption can affect prices too, especially when it is counter-trend. Consumption had been falling for a number of spurious reasons and that change was unexpected.

Jonathan, I wouldn't be

Jonathan,
I wouldn't be surprised either on calls for price controls.

John, I think you're dead on the "warm fuzzy" aspect of the article. It's almost as if Maureen Dowd wrote it. I saw the statcan article too.

Back40, I'm not disagreeing that the cattle market is cyclical, but where did you find the canadian beef imports only being %1 to %2 of U.S. consumption?

Hi Christopher, I got the

Hi Christopher,

I got the info from the USDA Foreign Agricultural Service web site. http://www.fas.usda.gov/

It has all sorts of trade data and weblishes its semi-interesting magazine, AgExporter.

Back40, thanks. How does the

Back40, thanks. How does the information there square with information from the Economic Research Service of the Department of Agriculture?
http://www.ers.usda.gov/briefing/cattle/Trade.htm

Is the 55% of imports the Statcan article mentions wrong?

I wrote more about this here:
http://everyman.typepad.com/dustbowl/2003/12/_justin_woodbur.html

The US imports more than it

The US imports more than it exports. It imports a lot from Canada and Mexico - our NAFTA partners - as well as Australia, New Zealand, Brazil and Argentina. But, the US produces huge amounts of beef which it consumes in local markets. Canada has a high percentage of the import market, but the import market is a small percentage of consumption.

The absolute numbers matter to our trading partners since they are small. A tiny share of the US market is a big deal for them. It's difficult and dangerous to dance with elephants but can be very rewarding.

Take a look at Drudge, 7:55

Take a look at Drudge, 7:55 P.M., 12.23.03, it seems as if we have mad cow here now, Washington state. Will beef prices rise now, or plummet in response? Also, will beef imports from Canada continue to be verboten? Interesting development.

Prices should fall since

Prices should fall since beef exports will fall.

Looks like Japan has already

Looks like Japan has already banned U.S. beef imports, and samples are being flown to the U.K.