Beef Prices Hit Record Highs
by Jill Johnson
April 16, 2014 4:04 PM
Beef prices are soaring, and in February they hit record highs. While it's welcome news for ranchers and farmers, it's bad news for those looking forward to the upcoming grilling season.
Life is good at Sioux Falls Regional Livestock.
Sioux Falls Regional Livestock Co-Owner Brad Klostergaard said, "The feeder cattle prices are at an all time high, fat cattle prices are at all time highs. It's strictly supply and demand."
Demand for beef is at an all time high, mainly because years of drought have cut herds to their lowest levels in more than 60 years.
Klostergaard said, "Our numbers are lower now than they were in the 1950's."
That means livestock producers are getting paid.
"The fat cattle, you know, around $1.50 a pound," said Klostergaard.
But that also means it's coming out of someone else's pocket. In February, the cost of USDA choice-grade beef reached a record retail price of $5.28 per pound, compared to nearly $5.00 at the same time last year, and nearly $4 in 2008. That's the highest price for beef since 1987.
Cleaver's Market General Manager Tyler Honke said, "That's a pretty significant jump, when you're dealing with selling meat price per pound. You have to butcher it. Take some loss on trim and that can add up real fast."
Honke says even though the price of beef costs more, in order to stay competitive, they're the ones taking a hit.
"We try to keep our prices at the same cost so our customers don't have to watch things jump up and down," said Honke.
Because they try to keep their prices down, they don't expect to see a hit in the number of customers walking through their doors.
Honke said, "You'll see some effect but not much. Grilling season is grilling season, people want to get out regardless."
In the next few months, we'll see just how much people are willing to pay.