Smart SpendingSmart Spending

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

Retail beef prices are near record highs, and there's no indication they're coming down anytime soon.

By Money Staff Feb 20, 2014 12:56PM

This post comes from Catey Hill at partner site MarketWatch.


MarketWatch on MSN MoneyBeef: 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 percent, according to government data beef price data released Thursday  finds that consumers paid an average of nearly $3.50 per pound for 100 percent ground beef.


Grocery shopping © Corbis

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 percent 8 percent 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 percent to 10 percent in 2014, ground beef could climb 10 percent to 15 percent.


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 percent of Americans say they eat less beef now than they did three years ago, compared with just 6 percent 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.


More from MarketWatch

264Comments
Feb 20, 2014 2:20PM
avatar
There is no Inflation ?  The Economy is Booming ?  You betcha for sure !  Forward !  LMFAO
Feb 20, 2014 2:22PM
avatar
So who came up with this great idea to put ethanol in gas?  One of the stupidest moves ever.  It reduces gas mileage and takes away, as well as drives up the price of livestock feed.  What happens when we have another bad harvest and there is another shortage? The price of meat will go through the roof.  BTW burger costing as much as steak is a stupid title.  As the price of hamburger goes up so does steak, because it is a better cut of meat.
Feb 20, 2014 2:03PM
avatar

Bacon's now a memory; beef appears soon to join. There's still some fish, and chicken. We're exploring Hamburger options with Kibbles 'n' Bits.

 

Woof!

Feb 20, 2014 2:20PM
avatar
Sadly Ground beef used to be something you could make a cheap meal out of......now its getting harder and harder to buy any meat when you are on a tight budget - those old standbys of Hamburger or chicken aren't so cheap anymore.    (and yes I do look for sales and freeze it when there are sales)
Feb 20, 2014 2:21PM
avatar

This is what comes from allowing  **** militant environmentalists to convince our even bigger

**** Progressive politicians to burn our food and feed as ethanol just to pander for a few more votes.  They should all be turned into fuel and burned.

Feb 20, 2014 2:40PM
avatar
whenever beef gets really pricey-----be it burgers or steak--------i simply stop buying it------it seems many others must do the same thing because a  large drop in price then follows the high price
Feb 20, 2014 2:41PM
avatar

The problem with the meat supply is four companies control 75% of the market and force farmers to work on contract.  This in turn ruins farmers and makes them dependant on the company.  When the farmer wants a fairer contract after adhering to all the corporate demands the corporation drops them and leaves the farmer in bankruptcy.  Meat prices are being artificially inflated as the producers get screwed for the sake of profits.

Feb 20, 2014 2:28PM
avatar
Why anyone would buy ground beef today is beyond me.  Go and buy the cheapest flank steak and ground it yourself.  At least you know what your own ground meat is made of.  They could put ground cow tails in that stuff and how would you know?  If you're old enough to remember how much better ground meat tasted, even 15 years ago, you'd know enough not to touch that crap today.
Feb 20, 2014 2:55PM
avatar

Lets be real about one thing:  Even when the herds get back to normal, we will still be paying high prices.  Anyone think that when supply stabilizes, the farmers will lower the prices?   AND even if they did, will the grocery stores lower the prices?  No, they will keep the prices high and enjoy the exhorbitant profit.


Same thing happened with gasoline.  We were told it was due to global warming, burgeoning markets in Asia, oil spills, conflict in the middle east, etc.  Fact is, they raise the prices because they want to and they can.

Feb 20, 2014 1:51PM
avatar
The modern metro cow has become self obsessed and no longer reproduces in significant numbers.
Feb 20, 2014 2:39PM
avatar
Looks like the Chick-Fil-A campaign Eat Mor Chiken is paying dividends!
Feb 20, 2014 2:20PM
avatar
drought has really hurt cattle farms. in texas most sold off their herds because of drought and it takes 3 years to replace
Feb 20, 2014 2:32PM
avatar
Expect alot of fast food joints to go out of business as the ocst increases will be unappealing to the general low paid public.  Healthier outcomes in people will also occur as the amount of meat in people's diets will significantly reduce.  Love how the government continues to tell us all that no inflation exists!
Feb 20, 2014 2:21PM
Feb 20, 2014 1:32PM
avatar
We buy ground chuck a couple of times a year, usually 20-30 pounds at a time and freeze it.  You can get pretty good sales around the grilling holidays (Memorial Day, Independence Day, etc...)
Feb 20, 2014 2:28PM
avatar

All brought to us by the empty minded Progressive liberals....


 

Feb 20, 2014 3:33PM
avatar

how odd ground beef prices are going up faster then steak

don't they both come from the same dead cow?


Feb 20, 2014 2:36PM
avatar
Interesting headline. Are there many low end products that in 20 years won't cost as much as a the high end products costs today? 
Feb 20, 2014 2:54PM
avatar

When minimum wage goes up, the price of hamburger (and everything else) will also go up.  Say goodbye to all dollar menus!

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

ABOUT SMART SPENDING

Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.

VIDEO ON MSN MONEY

TOOLS

More