Rising beef prices show no indication of reversing

Written by MCJStaff   // April 16, 2014   // 0 Comments

get-attachmentArticle courtesy of Associated Press via “The Rundown”

The highest beef prices in almost three decades have arrived just before
the start of grilling season, causing sticker shock for both consumers and restaurant owners – and relief isn’t likely anytime soon.

A dwindling number of cattle and growing export demand from countries such as China and Japan have caused the average retail cost of fresh beef to climb to $5.28 a pound in February, up almost a quarter from January and the highest price since 1987.

Everything that’s produced is being consumed, said Kevin Good, an analyst at CattleFax, a Colorado-based information group. And prices probably will stay high for a couple of years as cattle producers start to rebuild their herds amid big questions about whether the Southwest and parts of the Midwest will see enough rain to replenish pastures.

Hesitant consumers

Patrons at a grocery store in Lubbock seemed resigned to the high prices, but not happy.

“I quit buying steaks a while ago when the price went up,” said 59-year-old Lubbock resident Len Markham, who works at Texas Tech. She said she limits red meat purchases to hamburger, opting for chicken, pork and fish instead.

“I don’t buy (red) meat, period,” said fellow Lubbock resident Terry Olson, 67. “Not like I used to, because of the price.”

Restaurant reaction

Restaurant owners, too, must deal with the high prices.

“It really squeezes the small guys more,” Mark Hutchens, owner of the 50 Yard Line Steakhouse in Lubbock, said of nonchain restaurants. “You just can’t keep going up on people forever. I just think you have to stay competitive and keep your costs low.”

Fast-food restaurants are trimming costs by reducing the number of menu items and are offering other meat options, including turkey burgers, Robb said. Chain restaurants also try to buy in volume as much as they can, which essentially gives them a discount, Iowa State University assistant economics professor Lee Schulz said.

“That can help them when they’re seeing these higher prices,” he said.


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