Beef eaters can brace for sticker shock this summer
Burgers and steaks will cost more as wholesale prices reach all-time highs.
Sometimes it seems 2013 is turning into one hit to the pocketbook after another, with the payroll tax hike and steeper gas prices earlier this year. Now get ready for a third blow: record beef prices.
Wholesale prices hit an all-time high on Thursday, which will likely mean the priciest retail costs ever for beef in the coming weeks, The Wall Street Journal reports.
Choice-grade beef rose to a record $2.1137 per pound on Thursday, breaking a decade-old record, the paper noted in citing data from the U.S. Department of Agriculture.
While that doesn't sound like a lot, remember that's the wholesale cost. By the time the beef makes it to grocery stores, it's much more expensive. The monthly retail price for choice beef hit $5.26 per pound in April, and it's likely to climb from there.
What's driving the spike? Two years of droughts in ranching states such as Oklahoma, which led to higher feed costs and caused some ranchers to cut back on their herd size. That's sending consumers flocking toward chicken and pork, which are typically cheaper than beef.
It may be tough for many Americans to swallow the bigger beef costs, given that summer grilling season kicked off Monday. The top three weeks for beef sales are around Memorial Day, the Fourth of July and Labor Day.
"We were going to have hamburgers again, but prices were high for good meat," South Carolina resident John Boyanoski told The Wall Street Journal, adding that he planned to grill only chicken at his Memorial Day cookout. "It was a bit of sticker shock."
Rising prices may have already had an impact, as beef sales dropped 1.7% in the first quarter, according to Nielsen. Higher prices could also eat into the margins of meatpackers such as Tyson Foods (TSN) and hurt restaurants that rely on beef, such as McDonald's (MCD).
In the meantime, consumers already shelling out more for other goods may decide that chicken legs and veggie burgers look like tasty alternatives.
Follow Aimee Picchi on Twitter at @aimeepicchi.
Every time I shop, prices are climbing. Some have doubled.
Why isn't there any consumer protection ? There have been no wage increases and fuel has been about the same for years.
Why does the Government continue to deny this drastic inflation ?
6 months into the year and I`m almost out of venison. Hate to think I`m going to have to resort to buying beef. Especially when it`s at such a high price.
Blame the drought that covered ,much of the country over the past couple years. Ranchers couldn't afford to feed or water the cattle, so they sold them off.
We recently decided that we were going to give up beef altogether, with no exceptions. The skyrocketing prices were just one reason... we made the choice for many other important reasons as well. For those who still wish to consume beef, it seems that the beef industry just doesn't get it that we no longer have 'bottomless pockets' and that we can and will make different choices if needed. The rise in prices will hurt the beef industry and it's customers, like fast food, more than the consumer as we will inevitably move on to other more affordable alternatives.
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