USA: beef prices reach record levels, up by 74% on 2009
The price of beef in the United States has increased by 74% since 2009, to record levels. After seven years of shrinking herds, costs are rising faster than any other food group, reducing profit margins at Hormel Foods and forcing Costco and Chipotle to raise prices.
Supply is likely to remain scarce. It could take three years to increase the size of the herd, and the prolonged drought in Texas, the largest producer, has shrunk the pastures needed to raise young animals. The government says the US will become a net importer of beef in 2015.Cattle futures contracts - up by 23% last year in Chicago - could increase by 7.3%, to US$ 3.48 per kg by the end of December, according to a survey of five analysts at Bloomberg.
After years of high feed costs and drought, the US herd on January 1 stood at 87.7 million head, the lowest at the start of the year since 1951, and the seventh consecutive decline, shows data from the USDA.
High prices may compromise the increase in meat consumption. With a lower supply, per capita consumption will fall in 2015, while the consumption of chicken and pork will remain stable, says the USDA.