Beef eaters can brace for sticker shock this summer

Burgers and steaks will cost more as wholesale prices reach all-time highs.

By Aimee Picchi May 28, 2013 1:17PM

Packaged ground beef (© Frank Bean/Uppercut RF/Getty Images)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


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309Comments
May 28, 2013 3:25PM
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BS
Corn for ethanol is driving up feed prices and other commodities because so much farmland is being used for corn instead of other less profitable crops.

Subsidizing ethanol was one of the stupidest ideas in human history.
May 28, 2013 2:40PM
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But, but! Weren't we told there isn't any Inflation??

May 28, 2013 3:16PM
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I bet our fearless leaders eat beef any time they want!

May 28, 2013 2:40PM
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If prices are up, why are futures prices at the same level they have been for the last 4 months or so, right around the $120 mark.  Something doesn't add up, I suspect profits are up for the processors due to raising the prices for retail, all the while paying the same price for the raw material.
May 28, 2013 3:11PM
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so what the else is new, taxes beef gas clothes, you name it ,it goin up, just bend over and take, that's the gov`s mentality
May 28, 2013 3:29PM
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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 ?

May 28, 2013 3:00PM
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So, no inflation they say? Just keep printing more paper money and see what happens then...
May 28, 2013 2:28PM
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I guess we'll have to eat chicken

May 28, 2013 2:29PM
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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.

May 28, 2013 3:20PM
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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. 

May 28, 2013 2:13PM
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Looks like oatmeal, pink slime, sawdust, and earthworms are back at the top of the list of McFillers.
May 28, 2013 3:15PM
May 28, 2013 2:37PM
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I`m going to write a recipe for cats, My neighborhood is over run with them. Here kitty kitty!
May 28, 2013 2:36PM
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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.

May 28, 2013 3:18PM
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Of course this hurts those consumers who eat beef every day or even several times a day.  If you balance it with other foods such as chicken, fish, pork, legumes, grains, vegetables and other satifying and nutritious foods, these spikes shouldn't create the kind of panic I feel this article was intended to create.
May 28, 2013 2:43PM
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Whole strip loins this week at Carfagna's in Columbus OH  $3.97 a lb.  Limit 2  Get em while you can!! They are delicious!!
May 28, 2013 3:14PM
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I dropped down to once a week having beef, now it looks like I'm going to have to cut back even further.  Time to go get some Bison and Venison, while I am at it.
May 28, 2013 3:34PM
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To: Robin1620
 
"Good. According to research beef causes anything from cancers to heart disease. We'd be better off if beef disappeared completely, the big stupid e-coli carrying, methane gas blowing, crapping up the rivers and streams things."
 
I am a bit confused with your post. At first you were talking about cows, then you seem to have changed to politicians.
 
You described politicians perfectly with your " the big stupid e-coli carrying, methane gas blowing, crapping up the rivers and streams things." statement.
 
Lets try to keep on subject here, otherwise you may find yourself working for MSN.
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