The drought of 2012 is over but beef prices are still rising, and experts say the trend will continue for the next three years.
Dr. Chris Hurt, an agricultural economist with Purdue University, says high feed prices and severe drought in the U.S. during the past few years have contributed to a big drop in beef cattle numbers nationwide. The dwindling supply is responsible for steadily rising beef prices, which are expected to continue this year.
“Any time it goes up, it affects our bottom line, expansion hiring, everything,” said Dean Miller, owner of The Meat Shop of Indianapolis.
“My wife and I noticed that the prices were steadily increasing,” said Don Marlatt of Indianapolis.
According to Purdue University, retail beef prices rose by 10 percent in 2011 and another six percent last year. Hurt says they’re projected to keep climbing by another four percent in 2013.
Hurt says the problem isn’t about to go away. Beef cattle numbers are now down 18 percent since 2007, hitting their lowest levels since 1962. He says it takes about three years for the beef supply to build back up and prices will likely continue to climb until that happens.
“That puts us out to 2016 before we can increase beef supply,” Hurt said.
“That’s a concern for everyone,” Miller said. “If our prices go up. I mean, if our prices go up that’s hard on everybody.”
With little relief in sight, some consumers say they’ll shop smarter.
“This place has real good pricing so I’ll keep coming here,” said Crystal of Plainfield. “I budget for all of this and I’m definitely not a vegetarian so I like steak.”
“I like my steaks but I’m afraid I’m probably going to have to change over to something else now,” Marlatt said.
Americans have already been cutting back on beef as prices have risen. Hurt says the average person is now eating 10 pounds less of beef than they did in 2007.