That's translating directly into higher prices for cattle at all ages. Calf prices right now are higher than I've ever seen them. Beef prices average $5/lb in the markets, and the prices keep rising.
At the ranch end, where the cattle are produced, there's a lot of happy talk. After years of flat or declining prices, this is a welcome change. As one news story puts it:
"...A quarter pounder hamburger cost $3. The cost of the meat patty, I’m guessing, is less than 50 cents. Even if you doubled the price of the meat, making the burger cost $3.50, it would not affect sales much. Especially if the buyer often upgrades to a Big Mac EVM (extra value meal) for $4.95 or a McChicken for $4.34, not to mention a 16-ounce Coke for $1, a small latte for $1.60 or a medium shake for $1.80 in addition. Where else are you going to get a full meal for less than $5… Starbucks? I don’t see protesters picketing fast food places. The USDA (2012) said Americans spend 10 percent of their income for food. Another 50 cents on a burger doesn’t affect us near as much as a $1.50 per gallon increase in gasoline. And in the steakhouses from Outback to Ruth’s Chris, the cost of the meat is an even smaller percentage of the cost of the meal...." Source
If you're in the position to be selling cattle now, either finished beef or feeder cattle or stockers, you're in a pretty darned good spot to get a bigger check than ever before. Now if you're in the position of buying, you're going to have to hunt hard for any bargains.
I'd like to buy a few cattle this year, to feed out on my pastures I planted last fall, but these prices are really hard for me to stomach. Yep, I know there's good reason for it, and I know it's going to take years to provide more supply -- 2 to 3 years... but it's tough to put out that kind of money for a cautious guy like myself.
If you're in the market for beef, you might want to accelerate your purchase. It's not going to get cheaper this year.