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US beef prices are on the rise, meaning summer barbecues are likely to be more expensive this year.
Live cattle futures for June hit a record $2.17 per pound on the Chicago Mercantile Exchange on Monday. Prices are up nearly 12% this year, and have jumped a fifth in the past 12 months.
The rise means barbecue favorites such as hamburgers and steaks are set to become more expensive in the coming weeks.
“Many consumers have reached the ceiling of what they can afford,” Till Dudler, managing director of global consumer goods and services strategy for Accenture, told Business Insider.
“Faced with rising beef prices, they’ll inevitably start making trade-offs, either reducing beef consumption, switching to more affordable meats like chicken or pork, or embracing plant-based alternatives.”
According to Federal Reserve Bank of St Louis data, the average price of a pound of ground beef in US cities in April was a record $5.80. Prices have risen by almost 11% in the past year and it’s not looking like there’ll be a decline anytime soon.
The price rises are due to the smallest cattle herd for decades. The Department of Agriculture expects cattle inventories to decline to 86 million head this year, which would be the lowest level in 74 years.
Lance Zimmerman, a senior animal protein analyst for Rabo AgriFinance, previously told BI there were a number of factors involved.
When the pandemic struck, the US experienced one of the worst droughts in the past century, so suppliers started to reduce cattle herds.
Now, beef supplies are much tighter, and an increase in US exports of beef has further cut domestic availability. Also, unlike poultry, it takes close to three years to rear cows before they are ready for slaughter.
“Businesses relying heavily on beef — restaurants, retailers, and food service providers — will need to fundamentally rethink and reinvent their strategies,” Dudler said.
The post Why your barbecue is likely to cost more this summer appeared first on Business Insider.
