Just as grilling season gets underway, consumers can expect to pay less for burgers and steaks for their cookouts.
Burger and steak prices are set to be the lowest they’ve been in the past three years thanks to a surge in beef production. The cost of ground beef in grocery stores has dropped about 9 percent from a year ago, according to the U.S. Bureau of Labor Statistics. Steaks are down 6.6 percent.
“The cattle market is always in a cycle,” said Robert Mills, a member of the Virginia Farm Bureau Federation board of directors and a Pittsylvania County cow-calf producer.
“Two years ago, the cattle market was at an all-time high, so people started to keep heifers. It takes their offspring about two years to hit the market. That’s why we are seeing an oversupply of beef this year,” Mills explained. “When there’s an oversupply, prices go down and the consumer benefits.”
He added that there is a 50 percent to 60 percent reduction in cash receipts at the producer level this year. Last fall, cattle prices hit a low of $700 per head for a 500- to 600-pound calf. Prices two years ago were more than 50 percent higher.
“It will take a while for cattle prices to go back up. Some producers will decide not to replace future breeders,” Mills explained. “We hope we will see an increase in the cycle—that it will trend up in 2018-2019. It’s all about the market and watching where the market is trending.”
This year lower costs are expected to contribute to Americans eating 8 percent more red meat and poultry per capita compared to three years earlier—a record jump in government data going back to 1970. Beef, in particular, is expected to see increased consumer demand as retail prices drop, making the meat more competitive with cheaper products like pork and chicken.