United Soybean Board via flickr
It is a perfect storm of meat.
First there was the unrelenting drought. Add rising transportation costs. Add a weaker dollar and increasing demand for beef in other countries. All this added together means beef prices are heading upward as fast as a stampede.
"At the start of 2014, U.S. ranchers had 87.99 million head of cattle, the lowest total since 1951," writes Brad Tuttle at Time. "Long periods of drought in California and Texas are largely being blamed for the declining herd figures, so it's not like the numbers should come as much of a surprise. Neither should rising beef prices hitting consumers and restaurants (and restaurant customers, of course)."
Retail Marketing lists some of the prices for beef. Various cuts of loin, for example, have risen from last year such as from $8.64 to $9.99 a pound for one cut or $2.28 to $3.22 for another loin cut. Only a few cuts of beef have dropped a little in price such as rib.
Steve Campbell with the Star Telegram in Fort Worth, Texas, says beef prices are hitting barbecue smokers.
"How much have prices gone up in a year?" John Sanford, a BBQ owner, said to the Star Telegram. "Try in a month — prime brisket had gone up 50 cents a pound since December. Beef prices are killing everybody, and I mean everybody, in the barbecue business."
Martha White at Time looked at research by NPD Group, a market research firm that found the price increases will be a problem for restaurant-goers. "But it's likely to hit consumers even harder," White wrote. "NPD Group vice president Harry Balzer says that while only about 30 percent of what we pay at restaurants reflects the costs of food, around 80 percent of our grocery bill is food costs."
"Right now our supply is as low as it has been since the 1950s. The Jan. 1 inventory shows that the national herd and the Texas herd is shrinking further," Eldon White of the Fort Worth-based Texas and Southwestern Cattle Raisers Association told Campbell with the Star Telegram. "The public needs to recognize that this didn't happen overnight. We've been liquidating the beef cow herd in the United States for 16 of the last 18 years."
Stacey Vanek Smith at Marketplace spoke with Don Close, a cattle economist with Rabo AgriFinance. Close told Smith that increasing the supply of beef (aka cattle) is not easy. "Cows carry their calves for 9 months and steers aren't usually slaughtered for beef until they're around 2 years old," Smith wrote. "So, we probably won't see a substantial increase in beef supplies for another few years, and prices are likely to stay high."