By Tom Polansek, Heather Schlitz
CHICAGO (Reuters) -Beef prices set records last month at U.S. grocery stores, and economists expect they will climb further as demand increases during the summer grilling season that traditionally begins with cookouts on Memorial Day on Monday.
Higher prices hit consumers who are increasingly nervous about the economic impact of President Donald Trump’s trade policy and after Washington halted cattle imports from Mexico over a pest called New World screwworm, which could hike up beef prices further by tightening the cattle supply.
One consumer feeling the pinch is DeAndrea Chavis, an artificial intelligence analyst in Raleigh, North Carolina, who buys ground beef nearly every week to prep tacos and other dishes for lunch but lately is making smaller portions because of rising prices.
Chavis said she has seen lean ground beef prices climb above $9 per pound from $6 to $8 in recent months. She is planning to keep hamburgers on the menu for a cookout next week but may have more hot dogs in the mix to control costs.
“Ground beef is supposed to be a cheaper option,” said Chavis, 28. “Now that is even starting to add up.”
Ground chuck prices in April reached a record $6 per pound, up 14% from a year ago, after farmers slashed their cattle herds to a 74-year low due to a years-long drought that reduced grazing lands.
However, demand for beef is expected to reach a 39-year high as consumers stomach higher prices, Rabobank senior analyst Lance Zimmerman said.
A Memorial Day cookout for 10 people eating a mix of foods, including one cheeseburger and chicken sandwich apiece, will cost an estimated $103, up 4.2% from last year, according to Rabobank. Hamburger meat prices jumped 6.4%, the bank said.
Some consumers are buying cheaper cuts of beef, such as a top sirloin, to save money without switching to lower-cost chicken or pork, said Ian Anderson, market researcher for commodity data firm Expana.
“Folks are still looking to get that juicy steak, and they don’t want to pay ribeye prices sometimes,” he said.
‘IN LOVE’ WITH HAMBURGERS
The U.S. has increasingly relied on beef imports over the past 30 years to meet demand for ground beef.
Imports of Brazilian boneless beef trimmings used for hamburgers were a record 6,888 metric tons in the week ended on May 10, signaling strong demand, said Bob Brown, an independent livestock market analyst.
“We are so in love with hamburgers,” he said.
But the U.S. Department of Agriculture indefinitely blocked imports of Mexican cattle this month due to screwworm in Mexico.
U.S. feedlots fatten Mexican cattle for roughly six to eight months before sending them to slaughter, meaning the ban would hit beef supplies after the peak of summertime demand, economists said.
The USDA also closed the border for Mexican cattle imports from late November through February, which could tighten supplies this summer, they added.
“Slaughter has declined dramatically recently,” David Anderson, livestock economist at Texas A&M University, said. “If we have less beef produced, that’s part of the recipe for higher prices.”
At some specialty butcher shops, customers who are long accustomed to paying higher prices for fresh local meat haven’t pulled back on their spending, shop owners said.
“I don’t think people are shying away from meat,” Bill Begale, owner of Chicago butcher shop Paulina Market, said, noting that there are no shortages of customers for their fresh meat, homemade sausages and expansive deli items.
Chavis, in the meantime, said she has started shopping at Lidl and Aldi stores, instead of Food Lion and Walmart, as she hunts for cheaper ground beef.
Alas, she said, “it’s a problem all over.”
(Reporting by Tom Polansek and Heather SchlitzEditing by Emily Schmall and Frances Kerry)
