Tags: beef | prices | meat | food

Beef Prices Reach Highest Level Since 1987

By    |   Monday, 14 April 2014 12:09 PM

Beef prices have surged to the highest level in decades. And consumers shouldn't expect price cuts ahead of the summer grilling season, or anytime soon after, industry leaders warn.

This year has seen continually rising beef prices, with the average retail cost of fresh meat climbing to $5.28 a pound in February.

That's up almost a quarter from January and the highest price since 1987, reported the Associated Press.

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The heftier price tag for beef is the results of several factors which have strained supply.

U.S. cattle inventory hit a 63-year low, according to Bloomberg data, MarketWatch reports. And since “cow numbers were down…the lower supply meant higher prices,” William Hahn, an agricultural economist with the U.S. Department of Agriculture (USDA) explained.

The U.S. is the world's largest beef producer and demand in other countries, such as China and Japan are rising. As supply has tightened the U.S. has seen an increase in exports and decrease in imports, says the USDA.

Everything that's produced is being consumed, Kevin Good, an analyst at CattleFax, a Colorado-based information group told the AP.

High prices are good news for ranchers, especially those in Texas who for years have struggled amid drought and high feed prices, says AP. But as consumers and restaurant owners suffer sticker shock there are concerns about too much of a good thing.

Pete Bonds, a Texas rancher and president of the Texas and Southwestern Cattle Raisers Association, said that persistently high beef prices raises the risk of steering consumers to other meats.

Habits are already changing, the AP reports. Some consumers are either cutting back on red meat or avoiding beef purchases altogether. And some restaurants are responding by raising prices, cutting portion sizes and the number of beef-based menu items and expanding their offering of other meat options.

South Dakota rancher Chuck O'Connor expects some adjustments in purchasing habits but tells the AP consumers aren't likely to abandon beef for good.

“I'm sure some are maybe going to cut back some, but to say that people aren't going to buy it anymore, I don't think that's going to happen,” he said, adding, “I hope not.”

How price impacts Americans' appetite for red meat remains in question. But one thing that analysts seem sure of is that prices will not ease any time soon.

CattleFax's Good projects retail steak prices could climb 5 percent to 10 percent in 2014 and ground beef could climb 10 percent to 15 percent.

Record-high supermarket beef prices across the country are here to stay for the coming months, says the USDA. And according to some analysts’ projections, high prices are here to stay for couple years.

Editor's Note: 18.79% Annual Returns ... for Life?

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Economy
Beef prices have surged to the highest level in decades. And consumers shouldn't expect price cuts ahead of the summer grilling season, or anytime soon thereafter, industry leaders warn.
beef, prices, meat, food
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2014-09-14
Monday, 14 April 2014 12:09 PM
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