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home : news : north central illinois   May 24, 2016

11/16/2012 5:08:00 AM
Area meat suppliers: Price hike in beef expected


Jim Polancic, co-owner of Polancic’s Meats in Ottawa, trims a whole rib-eye roast. The price of beef went up this year but it hasn’t changed much in recent days, he said. The expected holiday season price hike will come next month, Polancic said.NewsTribune photo/Anthony Souffle
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Jim Polancic, co-owner of Polancic’s Meats in Ottawa, trims a whole rib-eye roast. The price of beef went up this year but it hasn’t changed much in recent days, he said. The expected holiday season price hike will come next month, Polancic said.

NewsTribune photo/Anthony Souffle
Our food habits
Our food habits
- Americans spend roughly 11 percent of their disposable income on food, with about 6 percent spent for home consumption and 5 percent at restaurants.
- American spending on food took a dip in 2009 but bounced back. In September we spent 5.6 percent more on at-home food than a year earlier, and 15.7 percent more away from home.
- Our annual red meat consumption dropped from 114 pounds per person in 2000 to 102 pounds in 2010. Beef dropped from 65 pounds to 57 pounds. Poultry consumption has increased about 3 percent.
Source: U.S. Department of Agriculture

Jeff Dankert
NewsTribune Reporter



The price of beef went up this year and is expected to keep rising but it might not be glaringly obvious at the butcher counter.
The consumer price for beef and veal dropped from August to September but was 5.4 percent higher than a year earlier. Steak prices were up 5.1 percent and ground beef prices were up 7.2 percent, according to an outlook report Oct. 25 from the U.S. Department of Agriculture.
Beef price in 2013 was forecast to rise 4 to 5 percent, a rate 1 percent higher than the average for all food types in the consumer price index, according to the report.
Right now beef prices are “pretty stable,” said Gary Miller, co-owner of Polancic’s Meats, Ottawa.
“This time of year with the holidays it will increase regardless of anything,” Miller said.  “That’s just the way it is.”
Co-owner Jim Polancic said prices now are pretty close to what they were last year. Prices jumped about a year ago, he said.
“What we’ve been told from our suppliers on the drought is that you probably won’t see the effect until sometime next year,” Polancic said.
Conventional wisdom this year is that the drought will drive up prices of food, including beef. The USDA’s report does not tie this year’s food price hikes directly to the drought, saying most of the price impact will be felt in 2013.
However, in the short term the drought is expected to increase the supply of beef and reduce prices. That’s because the drought reduced available feed and increased feed price, forcing many cattle to market and increasing beef supply, according to the USDA report.
“The market got kind of flooded,” Miller said. “Basically they sent anything into market and it probably kind of kept prices down. How is that going to affect the futures? You don’t know what (supplies are) available out there.”
The fat cattle market price, per pound of live weight, went up from $1.05 to $1.25, said beef farmer Randy Faber near Sublette. Fat cattle are the source of most retail beef cuts, he said.
“That price is edging its way up and it’s not at historic highs,” Faber said. “Cattle numbers are going to trend lower which means prices might stay strong or even go a little higher. Economists are saying the winter months are going to see some of the shortest beef supplies we’ve had in a long time.”
This will drive up price especially for high-end cuts like top sirloin and steaks, Faber said.
“What it’s done at the grocery store I really don’t know but I’m sure it’s got to be reflected in the grocery store price,” Faber said.
For the farmer, the high cost of feed due to the drought cancels out profits from higher beef price, Faber said.
“If you don’t have any feed advantage there’s not a lot of profit being made,” he said.












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