US beef, steak prices continue climbing
July 3, 2012
INDIANAPOLIS – US beef prices continue to increase as summer barbecue season is underway. During the past year, beef’s average retail price has increased 5.4 percent, including 0.6 percent in the past month, according to the US Department of Agriculture’s Consumer Price Index for Food.
What’s more, the Indianapolis Star reports the rate of increase for beef is more than price increases for not only other meats but food in general, which has been a consistent six-year trend.
Currently, the average retail price of beef is $5.04 per lb., up 28 percent from $3.94 in 2007. Agricultural economists blame this spike on shrinking beef herds plus the rising price of cattle feed.
Marsh grocery stores reports a decrease in beef sales and store management have said shoppers are opting to buy more pork and chicken to meet their budgets. Local Indiana Kroger stores have seen an increase in lamb, fried and roasted chicken sales. But shoppers also tend to compensate by buying lower-cost beef products or purchasing store-brand items.
On a national scale, beef herds are at their lowest level since 1952. Even Indiana, which is home to only approximately 0.7 percent of the US beef cattle supply, has had its beef ranks thinned by 31,000 since 2002, and by 322,000 since 1980, USDA reported.
The cost of feed for cattle is increasing because it is made primarily of soybeans and corn, said Chris Hurt, agricultural economist at Purdue Univ., and both are in high demand. As more corn is used to produce ethanol and more soybeans are exported to China, prices for both have doubled or tripled.
US steakhouses are also being squeezed by this situation. Beef costs are up 20 percent from last year, said Larry Griggers, chief executive officer of RPM Management, a franchisee arm of Ruth's Chris Steak House. Last year he increased his menu prices by 3 percent, but this year he plans to absorb it.