Turnaround in beef prices in sight
There have been a lot of changes at Jennings Premium Meats since it opened for business in 1954. One recent change is what customers are buying.
“When the beef prices started to move up, we started seeing people migrating from steaks to ground beef, pork and poultry,” Jason Jennings says. “People still come in and buy steaks and those sorts of things, but it’s not like it was.”
Cattle prices have set records for the past five years in a row, and that has increased prices at the meat case, says University of Missouri Extension agricultural economist Ron Plain.
“Consumers saw some very high beef prices last year,” Plain says. “On average, retail beef went for over $5.60 per pound.”
The run-up in prices is due to 18 straight years of smaller calf crops. Those smaller numbers tightened supplies, pushing prices higher. But a turnaround could be coming.
The U.S. Department of Agriculture recently revised the number of calves born in 2014. For the first time in nearly 20 years, calves increased from the year before.
“The crop was about half a percent larger by USDA’s estimates,” Plain says. “We can look forward to more cattle and a little bit better prices for consumers in the meat case.”
Although more beef is on the way, those calves won’t show up in grocery stores until 2016.
Jennings says lower beef prices will help consumers.
“Beef prices had gotten to a point where a lot of people had shied away from that and moved to other proteins,” he says. “I think that is going to be a good thing for people to be able to get back into the beef market, and not just into ground beef but roasts, steaks and briskets.”
But more beef at a lower price won’t be a win for everyone.
“Cattle producers are going to lose as they see cattle prices declining,” Plain says. “We still may average higher here in 2015 than last year, but I would guess cattle prices will be lower in 2016.”