By Dennis Seid
TUPELO – Billy and Joy Whitehead would rather cut back elsewhere instead of going without beef, a staple in the retired couple’s diet.
“Everything keeps going up but our Social Security checks,” said Billy. “But we come in once a week at least, maybe try to buy for the whole month.”
But Whitehead and other grocery shoppers have noticed they’re getting less beef for the buck these days.
Three years of droughts have decimated herds in key beef cattle states, forcing the price of beef to its highest point in at least 27 years, according to the U.S. Department of Agriculture.
The average retail price in January was $5.04, the highest price for a pound of fresh beef ever on records dating back to 1987. Consumers are paying about $3.50 a pound for fresh ground beef.
Bob Knight, the owner of Todd’s Big Star in Tupelo, said ground beef prices a decade ago were a paltry 89 cents a pound.
“We’ve definitely seen an increase,” he said. “Now we’re struggling to get ground beef under $3 a pound for the family pack.”
The family packs of ground beef are around 4 pounds and cost less per pound – much like volume discounting.
Undeterred, the Whiteheads continue to buy their supply of beef.
“I’d rather cut out something else than not have any meat,” Billy Whitehead said. “We try to have it at every meal.”
Grocery stores and restaurants have little choice but to pass on the additional cost to their customers.
And it’s not only the drought that’s affected beef cattle herds. Higher fuel and feed costs also have contributed to higher prices.
Cattle producers in California, the Great Plains states and Texas – where more than half of the nation’s beef supply is derived – have been selling off their herds because they can’t afford to feed them.
The influx of so much beef into the market hasn’t lowered prices, however, because of rising global demand. Exports also have forced prices higher. The cattle herd in the U.S. – the world’s largest beef producer – is at a 63-year-low, according to Bloomberg.
In Mississippi, beef industry production last year totaled about $289 million. Statewide, about 18,000 beef cattle operations have some 477,000 head of beef cows and 91,000 head of beef cow replacements.
State fares better
Jane Parish, a beef cattle specialist with Mississippi State University Extension, said Mississippi beef farmers have fared better than their counterparts out west.
“Over the past decade, the numbers have decreased, but not as bad; it’s been pretty consistent,” she said. “We haven’t had the severe conditions that producers have faced elsewhere.”
But higher prices don’t necessarily trickle down to the producer, Parish added.
The higher input costs – the expenses associated with cattle production – offset those increased prices.
“The high prices are good if you’re selling, but if you’re trying to get in the business, or you’re having to buy cattle – and you have to for one reason or another at some time – it’s not so good,” she said.
“They’re not getting rich,” Parish added.
The Whiteheads say they’re buying about the same amount of beef as they always have, but have learned to stretch out their purchases.
“Instead of eating a whole steak, I’ll cut it in half, that way we have eight smaller steaks instead of four big ones,” he said.
Clara Jordan, another shopper at Todd’s, also said the higher beef prices weren’t going to stop her from buying.
“I come here two, sometimes three times a week – you’ve got to have ground beef,” she said. “I make hamburgers, spaghetti, Hamburger Helper. … I’ve got lots of grandkids to feed.”
Not coming down
Experts say beef prices won’t be coming down anytime soon, either.
The USDA projects beef prices will rise faster than anything else this year. Steak retail prices could increase 5-10 percent this year, while ground beef could climb 10-15 percent.
In a statement, Sammy Blossom, executive director of the Mississippi Beef Council, said high prices are “simply a result of supply and demand.
“Because of years of drought in many of the nation’s cattle-producing regions, coupled with high production costs, the U.S. cow herd is at its smallest level in over 60 years. The resulting lower beef supplies have driven prices up. Mississippi’s cattlemen are enjoying historic high prices for their animals while the increases in production costs continue to plague profitability. These producers work each day to improve their land and cattle through better genetics, forage production and overall management practices.”