Why You Pay So Much for Your Burger

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According to a recent USA Today report, the price of ground beef has climbed from $1.29 per pound to a record-breaking $3.51 in the last three decades.

The continuing drought in the Midwest has dwindled herds to levels not seen in 60 years, forcing the prices of beef to spike to their current levels. Steak averages $4.81 a pound at the store and ground beef $3.51 — historically high numbers.

Prices hit their highest before the Memorial Day weekend. The average wholesale price for beef was $2.06 Thursday, up from $1.94 a year earlier, says Gary Morrison, a market analyst with Urner Barry, which publishes market news on agricultural commodities.

Morrison says prices aren’t likely to fall much before the next two big grilling holidays, Father’s Day on June 16 and the Fourth of July weekend.

David McMillan, a Texas chef, says he’s using secondary cuts of beef to keep down his prices.

“Short ribs are trendy so they’re priced through the roof, so we look at a chuck flat and we use that in a steak pot pie,” McMillan says.

“We do a steak stick on a skewer and we use an inside round, which is a little tougher cut off the rump, but we tenderize it.”

Phil Lempert, a food industry analyst in Santa Barbara, California, says high prices, coupled with the realization that it’s healthier to eat less red meat, are motivating consumers to consider other sources of protein.

“People are grilling more vegetables. They’re going to veggie burgers,” Lempert says. People are saying, ‘You can still have your burger, but have less of it and fill up the rest with grilled veggies.'”

According to Ricky Volpe, an economist at the USDA’s Economic Research Service, prices for feed and fuel surged in 2007 and 2008, so ranchers responded by culling their herds to keep costs down.

“Normally that would have raised beef prices, but at the same time the United States fell into a recession. That cut demand, so 2009 and 2010 saw flat food prices.”

In 2011, when corporate-owned media claimed the economy was beginning to recover, beef prices started to rise, but in 2011 and 2012 there were widespread droughts resulting in some of the highest prices for corn and soybeans in history.

“Feed was expensive, and once again ranchers culled their cattle because they couldn’t afford to feed them.”

Bill Hyman, executive director of the Independent Cattlemen’s Association in Lockhart, Texas, blames recent droughts and federal requirements that 7.5 billion gallons of renewable fuels be blended into the nation’s gasoline.

According to the National Corn Growers Association, 27% of the U.S. corn crop is used to produce ethanol. “As long as they give the ethanol subsidies to the grain producers, we’re going to have to live with high feed prices,” Hyman says.

Hyman adds that ranchers are cautious about building out their herds because they can’t be sure they’ll have grass to feed them.

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Spence Cooper
Inquisitive foodie with a professional investigative background and strong belief in the organic farm to table movement. Author of Bad Seeds: A FriendsEAT Guide to GMO's. Buy Now!
Spence Cooper

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