Consumers are paying more to grill choice cuts this summer

The Associated Press - ALBANY, Ga.

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Summer is Americas grilling season, when the smell of prime sirloin broiling over gas flames or charcoal drifts through the neighborhoods.

But this summer consumers will have to pay more for the finer cuts of U.S. beef they grill for friends and relatives who gather for backyard cookouts.

Increased demand, helped by a popular high-protein diet, has raised the average retail price for grade A beef cuts, such as steaks and roasts, to $3.61 per pound, 30 cents more than a year ago, according to the University of Georgia.

Beef demand peaks from Memorial Day to Labor Day and the increased demand often means higher prices, but this year they are higher than normal, said Curt Lacy, a university livestock economist.

He attributes some of it to competition with foreign consumers, particularly Asia and Mexico, who have developed a taste for U.S. beef and are willing to pay top dollar to get it.

Gregg Doud, chief economist for the National Cattlemen's Beef Association, said U.S. beef production hit a record 578 million pounds during the week of June 6 and second-quarter sales set another record at $9.45 billion.

The price is higher and the supply is higher, which is a really remarkable situation, Doud said. This industry has worked for close to 20 years on research and technology. This has happened in a situation where weve had very low prices. Its taken a lot of innovation ... to recapture a percentage of the diet.

A high-protein diet developed by Dr. Robert C. Atkins also has helped. He was often ridiculed by the scientific community, but 15 million copies of his book have been sold since it was published in 1972.

A month after Atkins' death in April, the New England Journal of Medicine reported on two studies that found that people on his high-protein, high-fat, low-carbohydrate diet lose twice as much weight over six months as those on a standard lowfat diet.

Consumers appear to have moved beyond the fat fears of the 1980's and early 1990's and now are focusing on variety and taste, said John McKissick, another University of Georgia livestock economist.

It appears that a good steak is very tasty to a lot of consumers, he said. And apparently consumers are still smiling while theyre paying (higher prices) because beef demand continues to go up.

Demand for Canadian beef is normally high around the world, but many countries, including the United States, have banned it because of a single case of mad cow disease detected in May.

We don't know how long that's going to last, but that's a reduction of about 4 percent of our supply that would have come out of Canada, McKissick said. There was concern it might impact demand in the United States, but that has not been the case. Domestic demand has been increasing since the late 1990s. We've had four solid years of demand growth for beef.

A Canadian investigation found no evidence that the disease had spread beyond the single cow, and Prime Minister Jean Chretien asked President Bush earlier this month to lift the ban, which is costing Canadian producers millions of dollars a day.

The beef association, a marketing group for the 1 million U.S. cattle producers, has asked the U.S. Department of Agriculture to work with Canada and its beef trading partners to establish a science-based protocol to protect humans and cattle before lifting the ban.

Georgia ranks 19th among states that produce beef cows and calves, but with 25,000 producers, they make up the largest commodity group in the state. Many of Georgia's cattle are raised in counties surrounding Atlanta, such as Walton County which has 400 farms, 200 of them with cattle, McKissick said.

Most of Georgias calves, as well as those from the rest of the country, are sent to feed lots in Texas, Kansas and the Midwest, where they continue to grow until they are large enough to slaughter. Texas and Kansas also lead the nation in beef cattle production.

McKissick said the industry's cyclical nature also affects prices.

When prices and demand drop, producers cut back on the size of their herds. With the increased demand, they are just now beginning to expand their herds, but it will take them about three years to catch up, he said.

Over the next few years, cattle numbers will be low, said McKissick, who believes consumers may face even higher prices for awhile.