As summer grilling season heats up, consumers may notice the price of beef is on the rise.
Overall beef prices have trended up each month since 2011 on the Bureau of Labor Statistics' consumer price index.
April's average price of ground beef was $3.27 a pound, up 9 percent compared with 2012. For USDA choice boneless sirloin steak, shoppers are paying about $6.86 a pound, an increase of more than 5 percent from a year before. And wholesale prices, or the amount meatpackers charge sellers for beef, reached an all-time high in April.
Food retailers are hesitant to pass these costs on to consumers, especially now as demand peaks for summer barbecues, said Ricky Volpe, an economist for the U.S. Department of Agriculture.
“Retailers are doing their best to pass these cost increases on as minimally and slowly as possibly,” he said.
Cattle inventory is at its smallest level in six decades, the result of ranchers liquidating much of their herds during years of drought. But consumers' taste for beef has remained stable in the U.S. and it's increasing globally, Volpe said.
That has caused classic inflation: low supply, high demand.
He predicts cattle inventories to bulk up and respond to the market, but it will take time. So beef prices are expected to continue to rise through 2014.
Where's the ... chicken?
Nationwide, consumers are shifting away from beef and pork to poultry, which has historically experienced less inflation, Volpe said.
But at Bill Kamp's Meat Market, when a customer wants a steak, a cheaper alternative like chicken breast isn't going to cut it, owner Bill Kamp said.
“We have not seen a fall off of demand at our place. Our sales are still good. But our prices are at record levels,” he said.
The meat market, at 7310 N Western, specializes in premium beef. Since the store doesn't sell other grocery items, they can't accept a lower profit on beef like a big grocery store can, Kamp said.
But on Memorial Day weekend, the traditional kickoff to grilling season, beef tenderloins were hot, despite being one of the pricier cuts of beef. “We just make sure that at a premium price, our customers are getting a premium product,” Kamp said.
It may seem like fruits and vegetables are taking a larger bite out of consumers' budgets, too, but prices are actually average this year, Volpe said. However, in 2012, unusually warm weather in California and Mexico led to an abundance of many summer favorites, resulting in cheap produce.
Vegetable prices fell 5 percent in 2012, which is very unusual and reflective of the abnormal weather, he said. “There are no bumper crops this year. Prices are normal, they just look high compared to what they were,” he said.
Retailers are doing their best to pass these cost increases on as minimally and slowly as possibly.”
U.S. Department of Agriculture economist