The price of hamburgers for summer picnics, barbecued brisket and steaks have been climbing for years, but customers don’t seem to be reaching for chicken.
High demand, high prices and spring rain have been positive for La Plata County ranchers and may encourage some growth.
“Everybody is in real good shape,” said Duane Cugnini, a local rancher and owner of Hi-Country Cattle Auction in Breen.
But years of drought and high prices for corn and alfalfa in 2012 and 2013 have made some producers cautious about investing in more cattle. Ranchers need the current high prices for beef to keep up with the cost of raising a herd, Cugnini said.
A pound of ground beef, on average, was about $4.20 across the country in March, up from $3.70 at this time last year. The average cost of a roast is $5.87 a pound, up from $5.20.
The rising prices have even impacted wholesale buyers such as Serious Texas Bar-B-Q, which had been able to insulate customers from the increases by signing contracts for meat a year in advance.
“We were able to hold out more than most people,” said Dan Howell, co-owner of the restaurant.
But now the restaurant can’t sign contracts in advance because the market is too volatile. As a result, they had to increase price of brisket, after the wholesale price increased almost 100 percent, he said.
For ranchers David and Jonathan Patcheck, who own about 700 head, the prices are encouraging, but they don’t expect many of their colleagues to build back their herds.
Many ranchers sold large number of cattle after the drought in 2002, and many of the older ranchers didn’t reinvest, David Patcheck said. Some opted to retire or maintain smaller herds.
The average age of a farmer or rancher in the U.S. was 57 in 2012, according to the Department of Agriculture.
“When they sell out, they don’t tend to get back in,” Patcheck said.
High feed costs in the winter and a lack of interest from younger generations in running a ranch have kept cattle numbers low, Cugnini said.
Building a herd also means taking on financial risk because it takes a while to see the profit while calves are growing, said Bob Bragg, a farm-and-ranch consultant.
Holding back heifers from the sale barn or Internet auctions to breed means shouldering extra feed costs, especially if a drought hits and the cows cannot graze on public lands or some other pasture, Bragg said.
“As you build your herd back, you’re going to have high costs,” he said.
The Patcheck brothers served between 11,000 to 12,000 pounds of hay a day this spring to their hungry herd. But they, along with about half of the cattle in the region, graze on public lands over the summer, which helps cut costs and keep ranchers in business.
The amount of rain La Plata County has received this month helped ensure the public grasses were healthy enough to graze, and the Forest Service plans to allow all the cattle permitted to graze in local mountains, said Matt Janowiak, Columbine District ranger.
“The way it’s started out this year, it looks to be another great year,” Cugnini said.
High prices and high demand may not be enough to sustain the cattle industry long term. Development and a growing population are threats.
“Every time somebody subdivides a ranch, it takes away from grazing,” Cugnini said.
Those who buy second homes and don’t maintain their land can encourage weed and prairie dog infestations.
Ranchers who find a niche selling organic beef locally might have more certainty in their future.
Sunnyside Meats, a local packing plant, has had strong growth year-over-year both for wholesale meat and packing services, said manager Holly Zink.
But even though Sunnyside’s prices do not fall in line with the national market, management also had to recently increase the price of the wholesale beef to keep pace with inflation. Sunnyside had not raised its prices in about two years, Zink said.
Sunnyside raised prices 10 to 15 percent for both wholesale products and services, she said. More consumers are buying their beef in bulk.
“We do see more people buying some livestock from their neighbor and having that processed for themselves,” she said.
For those visiting the grocery store, though, plan to pay more for that savory steak, while ranchers nurture their herds.
“I think this build-back is going to be fairly slow,” Bragg said.
mshinn@durangoherald.com
