Beef: It's What You Can't Afford For Dinner

[Mike]

Feb. 21, 2014, 12:05 p.m. EST

Tomorrow's hamburger may cost as much as today's steak

Beef prices expected to rise through 2016

By Catey Hill, MarketWatch

Beef: It's what you can't afford for dinner — for years to come.

Retail beef prices are near record highs. During 2013, the price consumers paid for ground beef climbed roughly 5%, according to government data beef price data released Thursday finds that consumers paid an average of nearly $3.50 per pound for 100% ground beef.

What's more, experts say that climbing beef prices are here to stay. The USDA's Economic Research Service projects that beef prices will rise faster than almost anything else this year. Don Close, a cattle economist with Rabo AgriFinance says he thinks prices this year could rise 7-8% and roughly the same amount in 2015. Kevin Good, a senior analyst at cattle research firm CattleFax, says that "higher prices will continue through 2015 or 2016."

Good says that ground beef may see especially steep price hikes. He thinks that while steak retail prices could climb 5-10% in 2014, ground beef could climb 10 — 15%.

So what's with the sky-high beef prices? The bigger beef bills have been partially due to the fact that the cattle herd in the U.S. — the largest beef producer in the world — fell to an estimated 63-year low, according to a Bloomberg survey. "Cow numbers were down…the lower supply meant higher prices," says William Hahn, an agricultural economist with the U.S. Department of Agriculture. And the dry spell in Texas, the nation's largest cattle producer, is exacerbating the issue of smaller herds. Plus, in 2012 and 2013, grain prices were particularly high, says Close.

That said, cattle herds are beginning to increase, says Good. But "it's not like poultry…it takes a longer time for a cattle to be ready for slaughter." Indeed, a calf born in the spring of 2013 would be bred in 2014, might have a calf by 2015 and that calf couldn't come to market until 2016, he explains. That means that the herd growth won't translate into a ton of new supply for a while.

And though, by some measures, U.S. consumer demand for beef has been declining — 39% of Americans say they eat less beef now than they did three years ago, compared with just 6% who say they eat more, according to the NPR-Truven Health Analytics Health Poll — some experts predict a small rise in demand or at least stable demand in the coming years as the economy improves. "While the price increases of beef are notable, this shouldn't price consumers out of the market," says Close.

Plus, says IBISWorld analyst Hester Jeon, global demand for beef is growing and exports are a solid portion of business for some cattle producers.

All of this means consumers will have to pay top dollar for beef for at least another year or two. The good news: There are a number of ways to save. Erin Chase, a consumer shopping expert for Savings.com , which makes the grocery savings app Favado, says that you should ask the meat counter clerk when certain items will likely go on sale and look for coupons. "Typically meat goes on sale for a week at a time," she says — so stock up when the sale hits and freeze the extra meat. She adds that the warehouse clubs like Costco often have good deals on meat and that you should start keeping a list of never-pay-more-than prices; so for example, if you find a sale on hamburgers, put that price on your list and then wait to buy burgers in the future only when they are near that sale price.

 

[4Diamond]

I say calf prices are where they need to be. Everything else can triple in price and it's fine but heaven forbid the cattleman or cattlewoman make a decent living.

 

[mwj]

The consumer always determines the price. They always have and they always will. Poultry and pork will benefit from more demand but they to can be moved down the list if they reach the point consumers will not purchase.

 

[3 M L & C]

I say calf prices are where they need to be. Everything else can triple in price and it's fine but heaven forbid the cattleman or cattlewoman make a decent living.

That may be true but not realistic. It's like when corn went up to 8 dollars. People just quit using as much as they would have otherwise. Inflation in the Ag production sector will never be what it should.

 

[4Diamond]

at a point it will become reality or we will all go out of business. Can't make it when you are in the red all the time.



Just like when gas goes up, people complain and moan but ultimately pay the price and go on.

 

[Aaron]

When Mcdonalds and the like top selling item is 'the Big Porker' or the 'McChicken' sandwich, I'll get worried. People love red meat and convenience.

 

[Faster horses]

I don't think anyone should apologize for beef prices. The problem we've had is that it didn't go up for years.......and then when it did, it went up fairly fast and was more noticeable. Anyway, that's the way I see it.

With just us two, I buy meat at the store which we had NEVER done. I think QUALITY is important, so you find the store that sells the best.One grocery here locally sells only CHOICE beef. I talked to the meat market manager and he said he was against it at first, as he thought they would lose customers over it, but just the opposite happened. He said they rarely have to take meat back now because of tenderness and quality. Price is only part of it......and yes, hamburger seems expensive.....it's up to $5/lb now, but what else can you buy for $5/lb??? Pork is cheaper right now, so we buy some pork too. That cuts down on the total cost of meat, for the people who are on a budget. My gripe with hamburger is that it can be tasteless! I can't figure that one out.
Cows go into hamburger, so it should have a beefy taste.......right? Safeway has about the best hamburger in this area......IMO.......I do think I'll go to one of the butcher shops and get some from them and see what we think. Hamburger has never been something we use more than anything else.

I do have to tell you, tho, I bought a Flat Iron ROAST and it was delicious. Utterly. And it wasn't all that expensive. It's too bad that young people really don't know how to cook roasts, etc. I've been part of cooking schools put on by our local CattleWomens organization and it's amazing that they don't know how to fix a decent roast.

 

[katrina]

I don't think anyone should apologize for beef prices. The problem we've had is that it didn't go up for years.......and then when it did, it went up fairly fast and was more noticeable. Anyway, that's the way I see it.

With just us two, I buy meat at the store which we had NEVER done. I think QUALITY is important, so you find the store that sells the best.One grocery here locally sells only CHOICE beef. I talked to the meat market manager and he said he was against it at first, as he thought they would lose customers over it, but just the opposite happened. He said they rarely have to take meat back now because of tenderness and quality. Price is only part of it......and yes, hamburger seems expensive.....it's up to $5/lb now, but what else can you buy for $5/lb??? Pork is cheaper right now, so we buy some pork too. That cuts down on the total cost of meat, for the people who are on a budget. My gripe with hamburger is that it can be tasteless! I can't figure that one out.
Cows go into hamburger, so it should have a beefy taste.......right? Safeway has about the best hamburger in this area......IMO.......I do think I'll go to one of the butcher shops and get some from them and see what we think. Hamburger has never been something we use more than anything else.

I do have to tell you, tho, I bought a Flat Iron ROAST and it was delicious. Utterly. And it wasn't all that expensive. It's too bad that young people really don't know how to cook roasts, etc. I've been part of cooking schools put on by our local CattleWomens organization and it's amazing that they don't know how to fix a decent roast.

They don't drink beer!

Fasters do you need some beef? We will be butchering here this spring/summer and I can put you on our list.

 

[Clarencen]

They are just trying to find excuses. It is all about inflation. When there is more phoney money out there then there is product the price goes up. If beef get so much to high buying will slow down so will the price

 

[I Luv Herfrds]

I am not sure what is going to happen but the biggest seller at the store is still the 80-20% ground beef.

 

[Faster horses]

I don't think anyone should apologize for beef prices. The problem we've had is that it didn't go up for years.......and then when it did, it went up fairly fast and was more noticeable. Anyway, that's the way I see it.

With just us two, I buy meat at the store which we had NEVER done. I think QUALITY is important, so you find the store that sells the best.One grocery here locally sells only CHOICE beef. I talked to the meat market manager and he said he was against it at first, as he thought they would lose customers over it, but just the opposite happened. He said they rarely have to take meat back now because of tenderness and quality. Price is only part of it......and yes, hamburger seems expensive.....it's up to $5/lb now, but what else can you buy for $5/lb??? Pork is cheaper right now, so we buy some pork too. That cuts down on the total cost of meat, for the people who are on a budget. My gripe with hamburger is that it can be tasteless! I can't figure that one out.
Cows go into hamburger, so it should have a beefy taste.......right? Safeway has about the best hamburger in this area......IMO.......I do think I'll go to one of the butcher shops and get some from them and see what we think. Hamburger has never been something we use more than anything else.

I do have to tell you, tho, I bought a Flat Iron ROAST and it was delicious. Utterly. And it wasn't all that expensive. It's too bad that young people really don't know how to cook roasts, etc. I've been part of cooking schools put on by our local CattleWomens organization and it's amazing that they don't know how to fix a decent roast.

They don't drink beer!

Fasters do you need some beef? We will be butchering here this spring/summer and I can put you on our list.

Thanks Katrina, for the offer. I might just take you up on that. We are kinda far apart tho...unless one of us is ready for a road trip...

I know, we could meet up in Deadwood!!!

 

[PureCountry]

I think a main reason for tasteless burger these days is the ammonia washing solution it goes through to mitigate E.Coli risk. This is common practice nowdays, and probably also why the 80-20 ground is a top seller - it has more fat which still gives it some flavor over the leaner grinds.

It has all meant good news for us selling grass finished. The first thing people say is that it has a beef flavor - whoda thunk it??

 

[Denny]

With a case of beer costing around $20 and a pack of cigarettes at $7.50 here I think most that want beef just need to prioritize there luxaries.

 

[bearvalley]

I agree with Faster horses " I don't think anyone should apologize for beef prices". When you factor in inflation.... the price of land, a tractor, a pickup etc. cattle are still priced to low. Notice I said cattle, not beef. Not to many years ago a study was done up here as to who got how much money out of a pound of beef. It was found that well over 50% was grabbed up by the retail sector. That's after the cow/calf, the backgrounder, the feedlot and packer get their cut. To me that's pretty lopsided. Even though the price of cattle has gone up I will bet they are still raking in their greedy share at the grocer level. If resistance to the price of beef developers maybe the adjustment needs made at the store shelf.
North Americans are used to a cheap food policy at the commodity level. Where else is far less spent on food than on toys and entertainment. In countries that have known hunger and are limited in the amount of beef they can produce ( or other food products ) the prices we are seeing now are still way cheap.

 

[Faster horses]

I think a main reason for tasteless burger these days is the ammonia washing solution it goes through to mitigate E.Coli risk. This is common practice nowdays, and probably also why the 80-20 ground is a top seller - it has more fat which still gives it some flavor over the leaner grinds.

It has all meant good news for us selling grass finished. The first thing people say is that it has a beef flavor - whoda thunk it??

I noticed at Safeway that the grass-fed products are way more pricey than the other beef offered. You guys must be doing something right. :wink:

 

[Aaron]

I always use the Olympics as a meter of how the world is doing. As long as all these countries can afford to put this show together, things are going A-Ok. When they can't afford to do it anymore, then, we might start coming down to reality of day-to-day life.

 

[Denny]

I always use the Olympics as a meter of how the world is doing. As long as all these countries can afford to put this show together, things are going A-Ok. When they can't afford to do it anymore, then, we might start coming down to reality of day-to-day life.

They will always have money for sports. Just look at every school no money for education but we can haul the 8th grade basketball team a 100 miles to a game that means nothing .

 

[Aaron]

I always use the Olympics as a meter of how the world is doing. As long as all these countries can afford to put this show together, things are going A-Ok. When they can't afford to do it anymore, then, we might start coming down to reality of day-to-day life.

They will always have money for sports. Just look at every school no money for education but we can haul the 8th grade basketball team a 100 miles to a game that means nothing .

That's why I don't get all caught up in these 'causes' everybody seems to want help with nowadays. Seems to me there is plenty of money and extra hands that can be found if priorities were set straight. When I look back on my school days, I think how much a school year could be shortened if it weren't for all the 'play' time that the schools use as a daycare.

 

[3 M L & C]

Everyone has some valled points. I'm not saying I think cattle price should be lower I'm saying that if people can buy pork or chicken and have money for cigarets and beer or buy beef and no cigarets they are going to choose chicken and pork more than they used to.

 

[pups and bucks]

Bought some hamburger at the grocery store today for over $5/lb.......never paid that much in my life........good thing I like pork.......you can only stretch a paycheck so far.....