Beef prices in the United States, already at a historic high after rising nearly 20 percent over the last year, are projected to rise even more this year.
A pound of 100 percent ground beef rose from $3.55 to $4.23 from February 2014 to February 2015, according to information from the Bureau of Labor Statistics. A pound of boneless steak likewise rose from $5.28 to $6.05.
Prices for all cuts are projected to increase 5 to 6 percent this year, more than any other food product.
That’s the bad news. The good news? Prices should level off or even drop next year.
Production Set to Rebound
Unlike some rising food prices, the rising cost of beef has little to do with the California drought. Instead, a series of other weather events has spurred the rise. A big drought in the cornbelt several years ago caused prices to rise for corn and soybeans—grains that now primarily feed animals—while another drought in Texas, Oklahoma, Kansas, Colorado, and New Mexico directly impacted cow-calf herds. And a snowstorm on the northern plains killed thousands of cattle in December 2013.
Producers are now working on expanding their herds, holding back some cattle from the market to breed more. This leaves fewer cattle to turn into beef for buyers, which has helped spur the almost constant price increases. Projected production for 2015 is only 24 million pounds, a five-year low down from 26.3 million in 2010.
The method, though, will help rebuild the depleted herds across the nation, and should start paying off as early as next year. The difficulty with replenishing the beef supply, versus other meats, is the time it takes to raise a calf—roughly 16 to 18 months from birth until cattle are ready for market.
“We'll see a little bit of a shortage over the summer,” said Brenda Boetel, professor of Agricultural Economics at the University of Wisconsin–River Falls. “I think beef prices will peak in the next couple weeks. It will go back up in the fall, but it probably won’t be as high as we’re seeing it, then next year the prices will be lower.”
