Beef prices likely to rise as severe drought hits western US force mass animal slaughter — and meat distributors say a natural disaster could keep supplies tight for years.
From supermarkets to plush steakhouses, purveyors warn that consumers could face painful price increases — especially on prime meats — as of this month.
“We don’t know where prices could end up, but it’s possible they will go back to 2020 levels,” said Victor Colello, director of meats for the Morton Williams grocery chain in New York City.
When the COVID-19 outbreak forced the closure of meat processing plants across the country, supplies also tightened, while closed consumers struggled for beef. In 2020, the grocer was selling rib meat for around $12 a pound, compared to just under $9 currently. Filet mignon had now risen to $18 per pound, compared to $14, according to Colello.
Currently, meat prices are well above pre-pandemic levels in 2019, when rib meat cost $6 per pound and filet mignon was $9 per pound, he said. According to the U.S. Bureau of Labor Statistics, the price of ground chuck was $5 a pound in June — not far from the June 2020 high of $5.33.
“We haven’t seen any increase yet, but if the drought continues over the next few weeks, our vendors are telling us prices will go up,” said Joe Paris, president of Gristeds and D’Agostinos supermarkets in New York City.
Steakhouses are in the worst condition. Veteran restaurateur Charlie Palmer, who operates 16 restaurants, including five steakhouses, said he expects prices to rise by about 5% to 10% by the end of the year. A $56 filet mignon can cost as much as $61 and a $72 ribeye can go up to $79.
In response, the acclaimed chef is already replacing some of the high-end steaks on his menu with “secondary cuts” like top sirloin, flatiron steaks and so-called lifter meat, which comes from the thin muscles around the shoulders.
“We’re going to see steak on menus that people have never heard of,” Palmer told The Post.
Uncle Jack’s Steakhouse, meanwhile, is weighing in to increase its $25 burger and steak sandwich to $28, or $29, owner Willie Daigel told The Post. Westside Manhattan Meat Emporium then added burgers and steak sandwiches to the dinner menu to give diners low-cost options during the pandemic.
The problem is that pastoralists can’t keep all the cows and herdsmen in their herds as grasslands have dried up amid the worst drought conditions in a decade. In June, 2,000 cattle died from heat stress in Kansas.
In response, ranchers have been forced to sell their animals early, reducing the number of old cows. By some estimates, if the animal husbandry industry gets rid of its old, calf-producing cows, the herd of American beef-producing cattle could drop by as much as 20%.
“The implication of fewer cows giving birth to calves is that beef prices will be higher in the next few years,” said Peter Bozo, vice president of Chef’s Warehouse.
Nebraska cattle rancher Brenda Masek said she was forced to rear her larger cows in April – the first time she has done so in a decade. Her Nebraska ranch, Bestole and Masek, had very little snow or rain in the winter.
“Everyone is watching their hay,” said Masek, who is also president of the Nebraska Cattlemen’s Association. “We are still going to get beef to consumers. But we will see higher prices especially with better cuts. ,
It takes 24 months to raise an animal to beef, and early slaughter is especially depleting the supply of prime-grade beef. In the last months of the cow’s life cycle, they are fed a diet rich in grain, which develops into the staple meat.
The cost of feeding cattle has been increased by the war in Ukraine, which produces 40% of the world’s grain. According to industry data, a bushel of corn costs $1.25 more than last year — or about $7 — and about $3 more than in 2019.
“We are facing a 40% increase in wholesale prices,” Kevin Lindgren, Baldor’s director of meat, seafood and poultry, told The Post. “Consumers will go from a filet mignon to an 8-ounce burger. And we’re already seeing that change.”
Lindgren said the upscale vendor for restaurants and gourmet food markets is paying about $8 per pound for New York Strip and Porterhouse Steak and expects to fork over $16 per pound in 2023.
“If the herds are brought down low enough, there could be beef inflation across the board,” said Daniel Romanoff, president of Bronx-based meat wholesaler Nebraskaland.