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Yes, we’ve been worried about what the drought ravaging the Mid-Western United States has done to the environment, and to volatile commodities prices.But for days (weeks even) we’ve been asking ourselves a horrific question — what will the drought do to the price of a delicious cut of juicy steak?
According to Kevin Good, senior market analyst for CattleFax, 70 per cent of the U.S. cattle inventory is located in regions of drought.
So we looked to the National Cattleman’s Beef Association to give us some insight as to what that means to our stomachs.
Bottom line: A lot of the grass that ranchers use to graze their cattle has dried up. It’s so bad that the Texas Department of Agriculture has set up a Hay Hotline for desperate ranchers that need to feed their herds.
If a rancher can’t get that kind of assistance, they’ll be forced to buy expensive feed.
If they can’t afford that, they have to decrease the size of their herds.
That means cheap beef for now. However once that supply is depleted, American ranchers will be left with a smaller supply in general, and because demand is still strong the price will likely shoot up.
Sounds like a little volatility, but we’re used to that.