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The Rising Price of Florida Cattle

Florida cattle ranchers are enjoying the highest prices paid for their beef calves in recent history. The boom is being driven by shrunken herds and pastures in the Midwest, and an increase in demand for beef overseas, say ranchers and industry experts.

The state, which ranks 11th in the nation in total beef cow inventory, plays one of the country’s leading roles in “cow-calf” operations or raising calves for beef. The live calves are sold when they reach 400 to 500 pounds on average, then shipped to states further west where they are “finished”: fattened for slaughter.

Some are then shipped in pieces back to Florida where the circle is complete when you fire up the grill and throw down some prime cuts and a few burgers. Ranchers, including those in Lee, Collier, Charlotte, Hendry, and Manatee counties, say their calves are in some cases being sold for nearly $2 per pound at live or online auctions.

“That would be a record,” said Steve Peterson, an agricultural statistician for the United States Department of Agriculture Florida Field Office. Mike Taylor, vice president of agribusiness with Collier Enterprises Inc., which owns herds in Hendry and Collier counties, said cattle prices are “pretty much as high as they’ve ever been.”

Here’s the recipe for Florida ranchers’ good fortune: the cattle herd in the United States is at its smallest point since 1950, the USDA says, reportedly due to droughts and fires in Midwest states such as Texas, Oklahoma, and Kansas. At the same time, a weak U.S. dollar has allowed some foreign countries to be able to afford U.S. beef more easily than in the past, said University of Florida associate professor and extension beef cattle specialist Matt Hersom. Finally, combine those factors with a relatively stable demand for beef stateside, and a burgeoning appetite for juicy cuts of bovine flesh in countries with growing economies — such as Turkey and China.

“(China) is like a bottomless pit,” when it comes to buying beef, said Renee Strickland, who is in charge of international livestock exporting for Strickland Ranch and Exports Inc., which has herds in Manatee County northeast of Punta Gorda. China actually buys more cattle from Australia than the United States, she adds. Indirectly, though, that is helping boost prices here.

While that’s a blessing for ranchers, their overhead costs for necessities such as cowboys, fuel, seed, and fertilizer has also risen. And what China giveth in terms of calf prices it taketh away in terms of overhead costs. They purchase such vast amounts of fertilizer, Mrs. Strickland said, that the prices here jumped sharply. “I think seed and hay are the next ones I fear going up directly because of their consumption… all those costs take a big bite out of what we’d like to see as that profit.”

But it’s always been a “dicey” industry when it comes to making a profit, said Bruce Strayhorn. The Fort Myers attorney also headquarters his inter-generational cow operation on family land he owns in Lee, Charlotte, and Hendry counties. The Strayhorn’s cattle brand is called Double Spade, and their ranch is “affectionately known” as “El Rancho Notorious.” Its history pre-dates the Civil War.

Even at current record sales prices — say you get $800 for a 400-pound calf — overhead costs for essentials such as cowboys, veterinary care, and fertilizer make entering Florida’s cow-calf industry tough. Ranchers often produce citrus and other agricultural products because downtimes would sink a cattle-only operation. A rancher’s burden is eased if he is fortunate enough to have land and cattle passed down for generations, Mr. Strayhorn notes.

The business still has its downsides. “You talk about headaches, there’s nothing like cattlemen getting a call at 3 in the morning, ‘I think your cows are out.’”

At market

Higher costs across the board mean consumers will pay more for meat in the supermarket. The rising cost of corn, which is used to finish Florida cattle once they’re shipped to Midwest states or Texas, is another reason beef is costlier. And more farmland in other states is being used to produce ethanol for fuel instead of corn.

Customers are reacting in different ways. Most of those at Whole Foods in Naples are less concerned with price than they are with quality, said meat cutter, Sean Constantineau.

He’s observed shoppers who are increasingly interested in buying pasture raised, grass-fed beef (the store buys it from Australia) because of its health value. Whole Foods ships in many cuts of “conventional” beef, raised on grass and corn, from Niman Ranch in California.

“I’d say beef is easily the biggest seller in our case,” Mr. Constantineau said. The store’s offerings also include chicken, pork, and buffalo.

Gary Bailey, owner of Bailey’s Beef Country in Port Charlotte, said customers looking for excellent flavor love his Certified Angus Beef, a brand that he has agreed to sell exclusively. It comes from Midwest operations but conceivably was born in the Sunshine State.

“A lot of people have cut back on consumption, so when they do eat beef, they want something that will chew well,” he said. “They want something that has flavor and taste… People are also, I think, very conscious about what they’re eating and how much beef they’re consuming. They’re concerned about where the beef comes from, hormones, antibiotics and what their diets consist off.”

How much it’s all worth

The total number of cattle and calves in Florida increased by 5 percent from 2010 to 2011, to more than 1.7 million head. That noble herd was deemed to be worth $449,237,000, an increase of more than $57.6 million from the year before. This year it should be worth even more.

But even as the value of hooves on the ground went up, cash receipts, or the amount that ranchers are actually earning from sales, edged off. Florida ranchers earned $499,237,000 in 2010 compared to $487,618,000 last year.

The discrepancy portends a bright near future for ranchers, some say because it means they’re holding on to more of their stock instead of selling it. On the other hand, that could also eventually lead to prices going down again. But that’s a cycle rancher who’ve been in the business long-term — often for generations — are used to.

“Sometimes when the price is good rather than selling you’re not selling; you’re thinking long-term; you’re thinking, if these high prices continue for a few years I’m better off increasing my heard size, not selling my inventory, and I’ll be better off in the long term,” said USDA statistician Mr. Peterson.

“We’re all trying to increase our numbers,” said rancher Mrs. Strickland.

Both she and Mr. Strayhorn find the reason to believe prices for their cattle will stay up, at least for two or three years. “One thing that bodes well is more and more land in Georgia, Alabama and Texas is coming out of livestock,” Mr. Strayhorn said, attributing the shrinkage in pastureland to subdivisions being built atop it, as well as because of an increase in corn grown for fuel.

A month for beef

May is a month to consider the virtues of beef, said Ashley Hughes, a representative for The Florida Beef Council. That’s because it is National Beef Month, as well as the first ever Florida Beef Month. The campaign to promote the incredible, edible cow is supported by ranchers: one dollar from the sale of every Florida calf or cow goes to the Beef Council.

“Our whole goal is when people fire up the grill they think about beef,” Ms. Hughes said. “We always try to emphasize purchasing value cuts of beef and knowing how to make the perfect steak so nothing goes to waste.”

She adds that it’s a crucial player in our economy, and always has been. Florida’s half-billion per year beef cattle industry is the oldest in the nation, says Florida Memory.com. On ranches, calves are born from roughly November to April. They’re nurtured for six to eight months and branding often occurs somewhere around the end of February. They usually ship out over the summer months.

“For being what most people don’t consider a typical cattle state such as Texas or Nebraska, we’re very proud of being 11th (in total beef cattle inventory),” Ms. Hughes said. “And we love that we have fifth- and sixth-generation cattle ranchers.”

While the tough, bony-looking breed called “cracker cattle” is a big part of Florida history, most of the cattle raised for beef here now are Brahman or a mix that includes that breed. Ms. Hughes suggested that, although they might cost you more at the supermarket, that doesn’t make beef overpriced. Rather, the increase brings the price in line with what beef should be selling for, more befitting ranchers efforts as well as the animal itself.

“At least now they’re getting what they deserve,” she said of the prices ranchers have been commanding.

As for the cows, they get eaten. And Mr. Strayhorn says the ones born and raised here in Florida haven’t changed too much sense, many believe, Spanish conquistadors brought them here in the 16th century.

“The typical Florida cow is a hearty beast which is very similar to what you would have seen the conquistadors bring over,” said Mr. Strayhorn, describing it as “a survivor… That little beast is what my grandfather used to call an eating machine because they’ve survived on not-great pasture. And you move them to West Texas and put ‘em in a feedlot (or) you show them Colorado corn and they explode and it’s almost like a kid in a candy store.”