Summer in the Northern Hemisphere officially begins Wednesday. Americans are already flocking to backyard barbeques and pool parties, drinking
Bud Light beer and munching on hamburgers and hotdogs. Those hosting backyard parties should keep tabs on grilling budgets as ground beef prices are set to test record highs as the US beef cow herd is the smallest in half a century.
According to the latest Bureau of Labor Statistics data, ground beef prices increased by 2% to $5.35 per pound -- about 10 cents below the peak set in August of $5.45, a record high.
In March, we pointed out, "US Cattle Prices Hit Nine-Year High As National Herd Drops To Half-Century Low."
Now cattle prices are at a record high amid a worsening drought across the Midwest, high feed costs, and sticky inflation.
Higher cattle prices cut meatpackers' profitability as ranches have the upper hand in slaughterhouse negotiations. This means those costs are passed to customers at the supermarket.
Cargill, the world's largest ground beef producer, expects cattle prices to soar this summer -- possibly even record highs. The question is whether a slowing economy will dent beef demand. If not, prices will continue to rise.
Consumers need to be conscious of meat prices as the grilling season begins. Prices will remain elevated as there is no short-term solution to reverse the downward trend in total beef cows.
However, there is some good news. Global food prices have been sliding for more than a year. And it gets better: wholesale egg prices collapsed.