What is in this article?:
- Restaurants can expect beef prices to keep rising
- Managing beef costs
Commodities experts say there's likely no relief in sight as beef prices hit record highs.
Beef prices hit an all-time high last week, topping the U.S. Department of Agriculture’s previous record set in 2003 — and prices will only continue to rise, according to commodities experts.
According to several consumer media reports, the price jumped to more than $2.11 per pound for choice-grade beef last week. In dollar amount, it was a record.
However, when adjusted for inflation, the price was hardly a record, said Richard Volpe, a research economist for the food economics division of the USDA.
“It’s not that anything particularly notable has happened in the past month or the past week,” Volpe said. “We are in a long-term sustained inflation for beef and veal prices.”
That puts restaurateurs in essentially the same position they were in last year, when drought caused beef prices to spike, said John Barone, president and commodities analyst at Market Vision Inc. Inflation is likely to continue through 2016 or possibly 2017, he said.
“There’s nothing unexpected about what happened this spring,” he said, adding that until last month, beef prices had been relatively stable through the inaugural months of 2013.
One issue for restaurateurs, Volpe said, is that menu prices aren’t rising in step with the rate of inflation for beef prices. “This probably means that the margins for those foods have shrunk more in the restaurant industry than at the supermarket,” he said.