Record High Beef Prices

High Demand, Low Supply

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Updated: Wed, 29 Jan 2014 07:55:41 CST

You may have noticed the price of hamburger and steak is going up.

And ranchers are watching their profits go up too, but there will be trouble rebuilding herds to meet the demand.

University of Nebraska ag economist, Matt Stockton says it's a perfect chain of events that are leading to an increase in beef prices.

"Because of the drought because of the depopulation of the cow herds in the United States, because of the conditions in the Midwest, as a result of the shrinkage in herds, there's less cattle available in the feedlots," said Stockton "Less cattle in the feedlots then translates to less cattle to slaughter. Less cattle to slaughter translates into smaller quantities of beef."

But in beef states like Nebraska, the demand is still high despite less supply.

"Retailers are beginning to look and say, okay, I didn't really buy enough beef, because things were high, now I'm going to buy a lot and so there was a surge in the wholesale prices of beef," said Stockton.

And according to Stockton the price may continue to rise.

And it's going to take time for ranchers to rebuild their herds.

"At least four to five years before you can really change the supplies to a great extent," he said.

Stockton says beef buyers will have to wait a while before they see lower prices in the supermarket.

"You might substitute a way by saying okay, I'll eat pork, I'll eat less beef, but maybe I won't eat as much, plus there's different cuts of beef," he said."Steak is a lot more expensive than hamburger, so maybe I'll eat beef, but you know that steak I really wanted, maybe I'll just save up for it and just have hamburgers, or I'll do something else."

Meaning when you decide to eat beef.

"You're going to have to pay more to get it," Stockton said.