Beef Prices Expected To Spike
By: Ray Doughty
Updated: August 10, 2012
The impact of the devastating drought is spreading from the farm to our dinner tables.
Record high grain prices are changing the cost of hamburgers, rib-eye steaks and all the other cuts of beef.
Customers at Kincaid's Meat Market in Indianapolis, Indiana have every reason to be concerned.
"We eat a lot of filet, buffalo burgers and just worry with the drought and the price of grain going up, it will skyrocket," said shopper Kate Vicars.
Beef prices, the USDA says, are already up about 15 percent from two years ago and may jump another five percent next year.
With 30 years in the business, Shawn Kelley fears the price of prime cuts - the highest quality of beef - may shoot even higher.
"It could go up 20-25 percent. It's guesswork right now, because you don't know how long the drought is going to last," Kelley said.
The drought has already sent grain prices to record highs.
Corn futures are trading at $8 a bushel, almost twice what corn cost four years ago.
It takes a lot of grain to raise beef.
Prices are so high a lot of cattlemen can't afford to feed their livestock.
They are sending herds to the slaughterhouse.
The rush to sell beef cattle and dairy cows is giving consumers some temporary savings.
"All of a sudden in the last couple of weeks, prices on beef are going down. How far down, we don't know," Kelley said.
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Or for how long.
Families looking to save money later should be looking for sales now.
"Now is a good time to put steaks and put them in the freezer," Kelley said.
For families with big appetites, meat lockers and deep freezers are as valuable as safe deposit boxes.
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