A shrinking cattle herd and increased demand from export nations has raised the price of beef to its highest levels in nearly 30 years. The average retail cost of fresh beef climbed to $5.28 a pound in February, up almost a quarter from January and the highest price since 1987, reports the Associated Press.
Everything that's produced is being consumed, said Kevin Good, an analyst at CattleFax, a Colorado-based information group. And prices likely will stay high for a couple of years as cattle producers start to rebuild their herds amid big questions about whether the Southwest and parts of the Midwest will see enough rain to replenish pastures.
White-tablecloth restaurants have adjusted the size of their steaks, making them thinner to offset the price increases, says Jim Robb, director of the Colorado-based Livestock Marketing Information Center. Some places now serve a 6-ounce sirloin, compared to 8- or 10-ounce portions offered years ago, he said.
And fast-food restaurants are trimming costs by reducing the number of menu items and are offering other meat options, including turkey burgers, Robb said. Chain restaurants also try to buy in volume as much as they can, which essentially gives them a discount, Iowa State University assistant economics professor Lee Schulz said.
"That can help them when they're seeing these higher prices," he said. "They can't do anything with the high prices."