Drought could drive up meat prices

FORT WAYNE, Ind. (WANE) - There have been a lot of side effects from the summer's drought, and now rising meat prices could be another one.

"Corn affects everything. Corn's going up right now. It's kind of scary, but we'll ride it out and see what happens," Scott Dunfee, the manager and butcher at The Hills Market in Fort Wayne, said.

The drought damaged a lot of crops, causing the cost of corn and hay to go up. That then translated to higher costs for cattle farmers.

"Farmers were waiting for the market to get where they needed it to be and finally had to take [their cattle] to market. Feed is so high they couldn't afford to feed the cattle any more so they had to get rid of them," Geary Rollins, the sales manager at Tim Didier Meats , said.

That flooded supply and caused meat prices to go down over the last few months. But, Rollins said they won't stay there.

"Now after all that dumping, it's turned back around. I get prices today and I see prices already up next week," he said.

It takes 15 to 18 months for cattle to be ready to go to market. That means it won't be a quick rebound to replenish the stock that was all just sold.

Tim Didier Meats cuts and delivers meat to more than 400 businesses around the region, but filling the orders is getting a little more tricky. 

"We sell to a lot of white tablecloth places that want higher grade product," Rollins said. "When we order choice or prime product, even at this market now, we're being shorted 50 percent of the beef."

Rollins said by using multiple suppliers he makes sure they meet their customer demands. The shortage of better beef can also be blamed on corn. 

"Corn feed gives the good marbling, and they usually feed it to them in the last few months of their life. We'll see a loss of that too because it's too expensive to feed them," he said.

As costs go up, Rollins said he'll try to keep his rates competitive. But, that can mean smaller profit margins for his business.

"Our competition forces what we can pass on. We need to pass on more than what we can, but instead maybe if we think we need to hire someone, we won't. We'll try to keep our costs down because of that. You can only pass off so much," Rollins.

Still, Rollins wouldn't be surprised to see some of the costs creep onto menus.

"I could see in restaurants, you know how you see market price for lobster tails? I think you could see that on filets," he said.

The Hills Market hasn't raised prices yet, but Dunfee said they'll have to if costs get too high.

"We're pretty confident that if prices do go up, we'll still see customers come in and get meat. Everybody's got to eat," Dunfee said. "Hopefully it won't go up too much. I don't know yet and even the distributors don't know what's going to happen."

In the meantime, people are stocking up.

"We've seen a lot of people come in buying in big bundles to fill freezers with meat to prepare for meat going up. In the last two weeks we sold six or seven half cows. Sometimes we wouldn't sell that in two months and the freezer bundles are going fast," Dunfee said.