I’ll never be one of those folks who talk about prices being too high. It’s music to my ears when I hear about feeder cattle bringing $1,000/head or cull bulls returning nearly $1,900. And I believe the new price levels are justified. Still, there are talks about riots in the street, and even the turmoil in Egypt and Tunisia has been partly attributed to rising food prices

Troy Marshall 2, BEEF Contributing Editor

February 10, 2011

2 Min Read
The Food/Price Dilemma

I’ll never be one of those folks who talk about prices being too high. It’s music to my ears when I hear about feeder cattle bringing $1,000/head or cull bulls returning nearly $1,900. And I believe the new price levels are justified. Still, there are talks about riots in the street, and even the turmoil in Egypt and Tunisia has been partly attributed to rising food prices.

There were concerns voiced this week about devastating drought in China, the largest wheat producer in the world, and the potential impact such a drought could have on global prices. The concern is that the run-up in cattle prices has largely been due to decreased supplies and increased global demand, not increased domestic demand. As a result, analysts are predicting losses in infrastructure and market share that may be difficult to replace.

Corn is the one notable exception, with demand being forever changed by way of ethanol subsidies and the resulting domino effect. Still, this price increase has been driven by decreased supplies, rising input costs and sufficient increases in export demand.

While the current prices are a necessary and welcome development, the causes are disturbing – a falling U.S. dollar, more ground moving out of ag into energy production and other areas, and rising input prices that have resulted in decreasing supplies in the face of increasing prices.

So, while higher prices are a great thing, there are legitimate concerns. These include: at what level will supplies increase, will we lose infrastructure, will we see continued erosion of market share to the point where we lose the battle for the center of the plate, and will rising food prices cause changes in global policies?

I know of no one who is predicting riots in the street as the result of higher food prices, but it would be naïve to believe that there won’t be repercussions, not only in terms of how food is purchased and consumed, but politically as well. As a country we have gotten pretty used to cheap food.

About the Author(s)

Troy Marshall 2

BEEF Contributing Editor

Troy Marshall is a multi-generational rancher who grew up in Wheatland, WY, and obtained an Equine Science/Animal Science degree from Colorado State University where he competed on both the livestock and World Champion Horse Judging teams. Following college, he worked as a market analyst for Cattle-Fax covering different regions of the country. Troy also worked as director of commercial marketing for two breed associations; these positions were some of the first to provide direct links tying breed associations to the commercial cow-calf industry.

A visionary with a great grasp for all segments of the industry, Troy is a regular opinion contributor to BEEF Cow-Calf Weekly. His columns are widely reprinted and provide in-depth reporting and commentary from the perspective of a producer who truly understands the economics and challenges of the different industry segments. He is also a partner/owner in Allied Genetic Resources, a company created to change the definition of customer service provided by the seedstock industry. Troy and his wife Lorna have three children. 

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