Record-high beef prices barbecuing consumers
Don't have a cow, but beef prices are on the rise.
USA Today reports: "Steak averages $4.81 a pound at the store and ground beef $3.51 — historically high numbers, according to economists. The spike is caused in part by high feed costs because of several droughts that have led to the smallest number of cattle in the U.S. herd since 1952."
Nation's Restaurant News says the higher prices may not be as bad as people think: "However, when adjusted for inflation, the price was hardly a record," said Richard Volpe, a research economist for the food economics division of the USDA. "It's not that anything particularly notable has happened in the past month or the past week. ... We are in a long-term, sustained inflation for beef and veal prices."
Global Meat News says global meat prices are expected to remain high as demand increases.
The problem with demand for beef is it takes, according to USA Today, three years to go from pregnant cow to a tasty burger.
The drought and rising demand for beef are not the only reasons prices are increasing, Bill Hyman, executive director of the Independent Cattlemen's Association, told USA Today. He says the federal government's mandate for ethanol plays a role. Ethanol comes from corn — one of the leading feeds for cattle. So the demand for ethanol from corn strains the supply of feed, and those prices go up.
Bloomberg/Businessweek reported recently on how some clever entrepreneurs are trying to create feed for cattle out of bugs — flies and maggots and the like.
"At our plant we can produce a few million black soldier fly eggs daily," Glen Courtright, founder of EnviroFlight, told Businessweek. "That's about 2,000 tons of a formulated animal feed every year."
Meanwhile, American Public Media says cattle ranchers are not seeing better prices as they sell their stock — the prices were locked in too long ago.
Even with the higher beef prices, Nation's Restaurant News says that menu prices have not gone up yet. This means restaurants will have to try to "manage beef costs through strategic marketing of non-beef proteins and making smart agreements with suppliers."