Slice a chunk off beef prices
CHICAGO — Brush the snow off that grill and get ready for a grilling season that could be prime for butchers and beef eaters alike.
Retail beef prices on average have been declining from historic highs two years ago that were largely the result of a yearslong drought in cattle country. The beef industry has rebounded in a big way: This year is expected to be the largest commercial beef production year since 2011, according to the U.S. Department of Agriculture.
Add a competitive grocery industry and some decent weather, and beef prices could be just right for consumers this spring and summer.
“We’re going to see some of the most
aggressive advertising for beef cuts of all types because (retailers) are striving to not just be competitive with their profits, but they’re also competing for market share,” said Lance Zimmerman, manager of research, analysis and data for Cattle Fax, a beef industry research group. “Consumers are going to win in a big way this year.”
About time: Some might say it’s about time. As the beef supply has replenished in recent years, the drop in cattle prices has outpaced the decline in retail beef prices.
Consider the average steer price for 2016 was about $121 per hundred pounds of meat, its lowest since 2012 when it was about $123, according to the USDA data.
But the 2016 annual average for all fresh beef retail prices — a composite value of beef cuts used to estimate the average retail value of total beef production — was about $5.73 per pound, significantly less than $6.03 in 2015 but still an increase of more than 22 percent from $4.69 in 2012.
That’s in part because retailers have taken the opportunity to recoup some of the profits lost two years ago, Zimmerman said. But rising per capita incomes in the U.S. and a strong export market for American beef also have kept demand high.
Those retail price figures also don’t reflect savings through advertisements, Zimmerman said. Beef advertisements in particular are considered key in driving foot traffic for the four major grilling holidays — Memorial Day, Father’s Day, Fourth of July and Labor Day.
Deflationary food prices have led consumers back to the meat counter, according to a recent Food Marketing Institute report titled “The Power of Meat.” And while shoppers still consider price per pound the top consideration, they’re also increasingly shopping for attributes they consider to be healthier or more sustainable, such as organic and grass-fed beef, the report said.
At Pete’s Fresh Market, a family-owned grocery chain in Chicago, meat buyer Paul Vassilakis said he’s already planning his advertisements for grilling holidays. Despite the gradual lowering of beef prices in recent years, there’s still week-to-week volatility for certain cuts, Vassilakis noted. For example, prices for “middle meat” cuts, which include skirt steaks, recently “skyrocketed.”
But Vassilakis believes there will be plenty of good deals for shoppers this summer.
“I think it’s going to be a good year,” Vassilakis said.