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2011 Beef Prices Rise 10%; Rancher Risk, Costs Did, Too

As beef prices have risen, consumers have had to adjust.

Stan Krutmeier stopped his tractor on a hillside Monday afternoon and fed his cattle a big bale of hay.

"The cattle prices are good, but the expenses are pretty high, too," Krutmeier says.

USDA data shows that beef prices rose 10% during 2011 and are near record levels. The U.S. cattle population is around 91 million, the lowest since 1952, according to the USDA.

Lots of people may think farmers are making big money off their cattle, but Krutmeier says the profit margins can be very thin.

"It takes $400-$600 to take care of a cow for a year," says Krutmeier.

If all goes well and the cow bears a healthy calf, the farmer may sell the calf for $800 or more when it reaches 500 lbs. A large portion of what might be seen as profit needs to be spent to replace older cows, cover the feed for cattle and calves, and meet other expenses.

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