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Could beef prices be on the rise?

Beef Products, Inc. announcement that it is halting production of lean finely-textured beef at three of its four plants yesterday could place increased pressure on an already tight beef supply. 

David Anderson, livestock economist with Texas AgriLife Extension says the beef that was taken from those trimmings will no longer be available in the food supply.  “What does that mean?” he says.  “It means higher prices.  It means higher prices for consumers because we are effectively cutting the supply of meat.”  The end result, he says, “Is higher prices.”

He says in the long-term there is a supply response from higher prices.  “Really what me might think about then is that there is a biological time to produce more cows,” he says.  “But with higher prices – ranchers will eventually respond and produce more cows.”

Anderson tells Brownfield eventually it could mean an increase in beef production – but that doesn’t make up for the high prices consumers will face in the meantime. 

American Meat Institute President J. Patrick Boyle says it would require as many as 1.5 Million more head of cattle to make up the difference from the loss of lean finely textured beef.

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