Story highlights Beef has gone through a $30-per-head spike since the beginning of the year.
A few cold fiscal quarters mean beef prices are poised to stay high, with no relief in sight.
The ranchers responsible for grazing our steak bones and cheddar cheese aren’t a happy bunch, either. That’s because they’re noticing a pretty significant price hike over the past few months, a shift that may impact the budgets of busy families.
While beef prices jumped during the $30-$80 per-head school year last fall, it looks like that pattern is poised to hold true this year, putting a $70 tab in the price basket before the holiday season hits.
A few harsh winter weather-related tax laws on the books have also got it in for ranchers: The number of hours they’re required to pay in federal taxes for even the smallest of their herds has gotten bumped up. Translation: Their weekly farm revenue shrinks, pushing cattle herds further into the red.
While USDA data on the ongoing prices is still relatively scarce, late-April media reports indicate the worst of the most recent beef shortage is probably past us, so pricing will start a slow decline at some point in the middle of this year.
What has prices jumping is a simple supply-and-demand equation: Demand is spiking, so the supply that was already flowing hasn’t increased as quickly. But this supply has been outsourced to Canada, where costs to grow and slaughter the animals are lower, also affecting beef prices.
Now that this supply shortfall is in full swing, it looks like we could see a $50-per-head increase on beef as early as January of next year. This price is well above both the historical average and what it was in the month before.
And as AAA points out, this hike could create a situation where higher gasoline prices threaten to negate much of the benefit that comes from a federal-tax break on gasoline.
Beef producers aren’t going anywhere, of course. It’ll take years of sustained price hikes for ranchers to get back to where they were before the drought began. Still, its spike this year is a reminder of how much our everyday life depends on where our beef comes from, where we shop and how we serve it. Here’s what you can do to help keep prices down.