PENNSYLVANIA Demand beefs up the price of cattle, but will rise last?

A mad-cow-related ban on Canadian beef helped prices reach record highs.
LEMOYNE, Pa. (AP) -- The price of filet mignon jumped 50 cents a pound at Glen Miller's Western Prime Beef and Deli on Wednesday morning, and manager Frank Heffelfinger said his supplier warned him to expect further price increases in the coming weeks.
"That's a big jump, 50 cents a pound," said Heffelfinger, who passed on the expense to customers of his Lemoyne butcher shop. "What else can you do? We have a percentage that we like, and that's it."
Voracious consumer demand, supply shortages and a ban on Canadian beef prompted by the discovery of a single case of mad cow disease in Alberta in May have combined to propel beef prices into record territory.
Prime slaughter steers at New Holland Sales Stables in Lancaster County commanded 93 cents a pound a week ago, a record that was shattered just four days later when choice cattle went for $1 a pound at Vintage Sales Stables in Paradise on Tuesday.
That set a national record for price in its category, said Kathryn Mattingly, spokeswoman with the U.S. Department of Agriculture's agriculture marketing service in Washington, D.C.
"This was a fancy slaughter steer; it was at the high end of the market," she said.
Pleased with prices
Cattle farmers are "thrilled to death," said Taylor Cox, with the USDA in New Holland. "This time a year ago, prices were around 65 to 67 cents for prime steers. Now you're talking about 95 cents for the same kind of cattle. That makes a big difference."
With slightly more than 1 million head of cattle slaughtered last year, Pennsylvania ranked seventh among states.
Nationally, the beef-cattle market began picking up steam after Canadian beef was prohibited in late May, a blanket ban that has been loosened slightly since then.
But the bull market really took off over the last three weeks as meatpackers "have been scrambling -- a better word might be panicking" to fill orders, said Bob Anderson, an industry analyst with Commodity Services Inc. in Des Moines, Iowa.
"It's unprecedented, a situation that very seldom do you see, this quick of a move in an upward direction," said analyst Travis Benson with Crystal River Capital in Carbondale, Colo.
Producers have been pushing to market younger, thinner animals, a short-term solution that has exacerbated supply shortfalls caused by the absence of Canadian beef, which had amounted to 4 percent to 5 percent of the U.S. market.
If consumers balk at higher prices, Anderson said, it could cool the white-hot market.
"The key question now in everybody's mind is: At what point will the consumer turn away? We've heard reports of restaurants putting Wite-Out on their menus and labeling it 'market price,'" Anderson said. "When restaurants did that before, it was a signal that the market was through, and shortly thereafter we came back to Earth."