Rising beef prices test barbeque plans, change McDonald’s menu
By Jay Keller
After a wet start to the season, outdoor cookouts are starting to spring up again but many would-be chefs are facing a tougher decision at the meat counter than last year.
Record-high wholesale beef prices have driven up prices across many retail industries, from grocery stores to restaurants to fast-food chains, since the beginning of May.
And since the U.S. Department of Agriculture reported prices hitting a 10-year high on May 3, the cost of wholesale beef has continued to set a new record every week by topping out at $201.68 per 100 pounds.
This upward trend has lead analysts and buyers to predict even loftier prices at grocery stores and retail food establishments in the coming weeks, just in time for the Memorial Day holiday.
“Consumers are seeing higher prices at the meat counter and the impact of those higher prices on beef consumption remains to be seen,” said Lee Schulz, an Iowa State University Extension livestock economist.
Restaurant chains are also feeling the impact of higher beef prices: McDonald’s last week announced plans to phase out and drop the one-third pound beef Angus burger from its menu.
McDonald’s says that its customers are bargain-minded and Richard Adams, a McDonald’s consultant, confirmed to the Associated Press recently that the Dollar Menu killed the Angus burger, especially when someone can buy four burgers for the price of one.
Other food operators and burger chains, like Burger King and Wendy’s, could find a similar situation where premier menu items compete against one-dollar-ish offerings.
Tyson Foods, one of the nation’s larger beef distributor, also recently announced a declining demand for premier cuts of meat as prices “beyond consumers’ tolerance levels at home and abroad.”
“Consumers opted for the relative value of chicken,” Tyson said in its quarterly report which reported fewer beef sales and higher beef prices.
The USDA predicts that beef prices could continue to rise into late 2013 and into 2014 but officials are hopeful that tighter cattle supplies will be offset by a rise in available supplies of chicken and pork products.