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The rising cost of beef


By Angie Rodenburg

Fri, May 2nd, 2014
Posted in All Features

Rising beef prices have had effects on restaurant prices. Price trends have consumers concerned and are forcing them to reconsider their spending habits. Photo by Angi Rodenburg

If you have taken a trip to the grocery store or have gone out to eat in the last several months, chances are you have noticed a price hike, especially in beef. The Bureau of Labor Statistics reports the average consumer price of ground beef per pound to be $3.70 as of March 2014. In March 2010, the average cost of beef per pound was $2.24. While the exact price increase depends on the cut of beef the consumer is buying, the overall cost of beef has gone up substantially.

Several factors play into the rising cost of beef. Recent droughts in areas like Texas and rising feed costs have played a large hand in the increased cost of beef. Droughts harm the crop yields, causing an increase in feed cost. Many farmers opted to sell their cows during this time as the expense of raising them to slaughtering age grew, making the beef farming industry less profitable. With fewer cattle being farmed there became a natural supply and demand issue, causing a hike in beef prices.

These problematic issues in certain parts of the country have contributed to the rising cost of beef at the retail counter. Ryan Oian, a beef farmer in Rushford, Minn., said, “In the last five years we have seen a lot of cyclical changes in the beef industry. The higher costs of raising commodities, drought conditions in 2012 and the last two years of harsh winter and spring calving seasons have made it challenging. The higher price for our cattle at market is a welcomed change.”

This change is not good news for everyone, though. Business owners like Debbie Kitchens, owner of The Creamery in Rushford, says that the hike in beef prices is having a negative effect on business. Kitchens first noticed the prices increasing in the Fall of 2013. As a result they had to increase their prices in January. Kitchens has had to be more creative in finding ways to save money on beef to try to avoid too much of a menu price increase. Kitchens says that she shops around a lot more for her beef products and is always looking for a sale. The same goes for Judy Christensen, owner of Stumpy’s in Rushford.

Christensen shared that they are unfortunately going to have to increase prices again soon despite having already made an increase only a few months ago. Restaurants take the hardest hit when there is a price hike in food items. Christensen commented, however, that it isn’t as difficult in a small farming community for people to understand the need for a price increase. That understanding is helpful to business as they make some needed changes.

Steve Lea, Meat Manager at Rushford Foods, has not noticed any drastic change in sales on beef. Despite the 16 percent increase from last year’s prices, customers are still buying beef. “Some people might eat more chicken...but it’s like gas prices increasing, you still need it even if it costs more,” said Lea.

While the price increase might be harsh on restaurants, grocery stores haven’t seem to be hit as hard. It is still much cheaper for a family to buy a $10 package of beef to make a couple meals from than it is for a family to go out to dinner for one meal. Lea noted that in farming communities, the higher beef prices are not necessarily a bad thing. Many people are in some way connected to the farming industry, so when farmers do well, the community does well.

For those not connected to the farming industry, however, this increase, like any inflation, is not welcomed. Some people may find themselves eating more chicken to save money, but as consumers grow accustomed to the new prices, families just might find burgers back on the dinner table before they know it.

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