Beef prices soar as cattle herds dwindle

Grocery stores and fast-food chains worry that costs will keep climbing.

By Kim Peterson Jun 13, 2012 1:52PM
Image: Packaged ground beef (© Frank Bean/Uppercut RF/Getty Images)Mealtime choices are changing across America, a country that has raised generations on red meat and potatoes.

The beef is disappearing.

Americans are eating less beef, and the size of the cattle herd has fallen to its smallest since 1952. Beef prices are rising, and fast-food chains and other companies are worried about increasing materials costs.

Beef consumption has fallen for six years straight, Bloomberg reports. There are a number of reasons, including the "pink slime" controversy over treated meat. Americans are also more concerned about their health. And beef has become very expensive -- ground beef hit an average of $3.02 a pound in March, the highest since 1984.

The Livestock Marketing Information Center predicts record beef prices this year, Bloomberg reports. We could see those higher costs at stores and at restaurants.

The main reason beef prices are climbing is that there are fewer cows -- only 90.77 million head at the beginning of this year, a decline of 2.1% from the year before, Bloomberg reports. Drought across America has forced farmers to keep herds low.

Don't expect many changes, either. The U.S. Department of Agriculture forecasts beef stocks to decline further in 2013, though beef imports may rise slightly to help meet the shortage.

These higher prices are weighing heavily on the minds of executives at fast-food companies and grocery stores. Costco (COST) said it's dealing with rising beef prices this year, Bloomberg reports. Wendy's (WEN) and McDonald's (MCD) are feeling the pain as well.

The result? America will continue to move away from beef to pork, chicken and other options. Prices are simply getting too high. A juicy steak will become an indulgence, a treat that we can't afford too often. Tofu, anyone?

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713Comments
Jun 13, 2012 3:26PM
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I am not a vegeterian, but definitely leaning in that direction. I say 'good riddens' to beef.  And  I wouldn't cry about the loss of pork either.
Jun 13, 2012 3:25PM
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Of course prices are rising to record levels.  Do people think the prices are going to start dropping back to the 1800's pricing?
Jun 13, 2012 3:25PM
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this has been going on for years. Also as world population gose up so dose the food need China buys all of Candas hogs every year.
Jun 13, 2012 3:24PM
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Let me guess ....hmmmmmmmmmmm.   more subsidies. what a bunch of azsholes

Jun 13, 2012 3:23PM
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The record droughts have forced cattlemen to decrease their herds, the droughts have also made cattlefeed more expensive. Don't gloat about the demand for beef going down, think that you will start seeing lots of food stuffs that include grains going through the roof.
Jun 13, 2012 3:21PM
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It's what's for dinner. It seems like this is another market that the seculators are playing with. We'll see what happens.
Jun 13, 2012 3:21PM
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I woould eat more beef if the price went down.
Jun 13, 2012 3:20PM
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Demand is down, price goes up!! Sounds like oil.
Makes total sense. If demand is down, and herd sizes are down, shouldn't the price stay the same?
There's always a foggy explanation as to why the consumer gets the shaft, let's hear it.

Jun 13, 2012 3:19PM
Jun 13, 2012 3:19PM
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This media and beef industry article is meant to scare you and having you buy into the idea that beef is getting scarce and you should start eating more beef........I dare the meat industry to raise prices ..The back lash will be felt as surely as B of A felt the ATM fee of 5.00 when it tried to raise fees...and charge higher ATM transaction fees....They got .Egg on their face......Watch big Beef get the same response.....watch the meat rot on the shelves......!
Jun 13, 2012 3:19PM
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Sounds like a good time to become vegetarian.
Jun 13, 2012 3:17PM
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Good......we should all be vegans and stop the abuse and slaughter of cows.  That goes for all the other animals we consume also.
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