Beef prices reach record highs - KMOV.com

Beef prices reach record highs

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In this photo take March 1, 2011, meat manager Mike Watson stocks the shelves at a Kroger Co. supermarket, in Cincinnati. Wholesale prices rise 1.6 pct. due to biggest jump in food costs in more than 36 years. (AP Photo/Al Behrman) By Al Behrman In this photo take March 1, 2011, meat manager Mike Watson stocks the shelves at a Kroger Co. supermarket, in Cincinnati. Wholesale prices rise 1.6 pct. due to biggest jump in food costs in more than 36 years. (AP Photo/Al Behrman) By Al Behrman

(KMOV) -- If you plan to bar-be-que weekend, you might be in for sticker shock at the meat counter.  Beef prices are at a record high, and they are expected to keep going up. 

I spent the day going from a cattle ranch to a butcher to a top steak house to find out what's behind the rising costs.

The beef I bought for dinner this weekend cost just less than $9.  That's 20 percent higher than I would have paid for the same cut at the same store last year.  And bar-be-que weather came quicker than expected, adding to a higher demand. 

Downtown steakhouse Prime 1000 is rolling out a new menu so it can increase prices to keep up with what Chef Ray Carpenter pays per pound.

"My steak prices are up $3 a pound from what they were last week," Carpenter said.  "But I can't change my menu price every day." 

But butcher shops can.  And Mannino's Market says it's paying 20 percent more for the same beef this year over last year.          

"My ribeyes for example -- this week I have it for $9.49," Carmen Mannino, owner of the market, said.  "Last year at this time, they were $7.99."

That equals about an extra $5 more per steak.

"Even the freight to get it to you -- all the vendors charge more money on delivery for the gas prices," Mannino said.

"What's that do to your store? For you guys?" I asked.

"Well, it of course lowers our [profit] margin," Mannino said.  "We're paying more but we can't get the mark up that we usually get."

Certain cuts are also hard to come by.

"It is very good for the beef business right now," Andrea Lloyd, cattle owner, said.

Lloyd can get top dollar for her calves because of simple supply and demand.  About 92 million cattle make up the U.S. herd, which is the lowest number since the 1950s, even though the number of people in the U.S. has nearly doubled since then.  Droughts in Texas and Oklahoma thinned the herd.  Plus, exports of American beef have set a record high.  Andrea says the "three Fs" make it cost more to get from the cattle ranch to the kitchen table. 

"Feed, fuel and fertilizer are all really high right now, really expensive and so those are three of the biggest inputs that go into raising cattle," Lloyd said.  "So when those prices are high, it gets passed on to the consumer."

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