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Senior Contributor

Is beef turning into a luxury?

Article in the local Iowa paper about beef prices. They say another 10% price increase by summer, perhaps time to stock the freezer with rib-eye steaks. At one high-end grocery store here in the Twin Cities, they sell Prime Beef, not Choice, and a Prime Rib-eye steak is over $18/pound. It is Prime Graded meat and has alot of marbling of fat in the meat. It is some of the best beef I have ever eaten.




Is beef turning into a luxury?

Beef prices are expected to increase as much as 10 percent by summer, leading beef producers and sellers to worry that their product might become a luxury.

“We can’t let beef turn into lobster,” said Ed Greiman of Garner, the president of the Iowa Cattlemen’s Association.

Retail beef prices have risen by an average of $1 per pound since 2007. Prices for cattle have jumped by as much as 25 percent in the past two years as the nation’s herd dropped to its lowest level in six decades while foreign export demand boomed.

At the Dahl’s Foods supermarket at 4343 Merle Hay Road in Des Moines, meat director Mike Hoffman showed smaller, cheaper cuts of beef selling for less than $4 per package. Those “will keep customers’ taste for beef alive,” he said.

Hoffman said that many of the choicer cuts of steak such as rib-eye and New York strip now are sold in 12-ounce cuts rather than the traditional 16-ounce cuts to slip the checkout price under record prices per pound.

“Our suppliers have held the line as best as they could, but we’ve seen a 5 to 10 percent increase in wholesale costs in recent months,” he said. “Some of that cost has to be passed on.”

“Those folks who have freezer storage space at home might want to stock up now, while we’re still in the low-demand winter season before prices go up,” Hoffman advised.

At the venerable Jesse’s Embers at 3301 Ingersoll Ave. in Des Moines, co-owner Deena Edelstein watched the lunchtime crowd fill the 78 seats. The aroma of beef from the open grill spread over the 50-year-old restaurant’s little dining room.

She and partner Marty Scarpino are raising prices by about $1 for most items.

“We’ll get our new menus back from the printer in a couple of days,” she said last week. “We have to raise our prices, and we hate to do it. But the price of meat keeps going up.”

An Ember’s lunch customer, bail bond company owner Sean Sweeney, knows beef from the producing end. He grew up on a northern Iowa cattle farm near Osage that still is in the family.

“The cattle producers are caught between a rock and a hard place,” Sweeney said. “The price of corn is high, so cattle producers can’t afford to keep as many animals. So you have fewer animals and high demand, and that creates high prices.”

Corn prices have averaged $7 per bushel in the past 12 months.

“Beef is in danger of becoming a luxury item,” Sweeney said. “That won’t be good.”

Another Ember’s customer, retired construction company executive Dwayne McAninch, said: “Wages for working people haven’t kept up enough, so they can’t afford good beef cuts. That’s the problem for beef.”

But the allure of beef endures through high prices, especially for those who equate beef with the good life.

Ladell Gossen of West Des Moines finished a ground beef patty lunch. “When I was a kid growing up in Rock Rapids, I didn’t have much money. I envied people who ate good beef,” he said. “Now I can afford it, and I eat as much beef as I can.”

Signs of weakening demand for beef have shown up in recent weeks.

Beef’s rivals in the protein business, pork and poultry, can reproduce and grow their animal herds much faster than the gestation-to-market timetable of 14 months or more. So attractive prices mean that the competition for the protein dollar has become fierce.

Chicken prices have reached record levels. But even at a 2012 average retail cost of $2 per pound, chicken is cheaper than the $3.08 per pound composite retail average for all beef cuts from hamburger to choice filets, according to U.S. Department of Agriculture surveys.

Cattle trader Dennis Smith of Archer Financial Services in Chicago said lower chicken prices “will prove to be a tough competitor (for beef) for the consumer dollar.”

Jesse’s Embers head chef Eddy Perryman notes that as beef prices have risen, “we’ve sold a ton of chicken, probably as much as ever.”

Chicken and fish are crowding the market to the point where Jesse’s Embers, for a half-century a temple of beef, last year added the word “Seafood” to the restaurant’s sign that fronts Ingersoll Avenue.

“We want to make sure that customers know that we have more than beef,” Edelstein said.

But many Jesse’s customers vowed to eat through high prices.

“I love beef, and I’ll keep eating it even if the price goes up,” Des Moines attorney Ben Bergmann said as he prepared to bite into Eddy’s special, a beef sandwich covered with cheese and onions, a creation of Perryman.

In recent years, much of the rocket boost for beef demand and prices has come from foreign markets, where U.S. beef is a sign of rising living standards.

But in late 2012, the markets indicated softened demand for beef. Exports that ran 30 percent ahead of the year earlier in 2011 last year dropped by 12 percent as cattle prices bumped against record levels in the second half of 2012.

American retailers, even in the beef-loving Midwest, know that the same price resistance shown by customers in Japan, Mexico, South Korea and Canada can easily appear at their own meat counters.

“We’ve done a lot to repackage and market beef so that it is more economic,” said Hoffman, of Dahl’s. The store sells smaller cuts such as the Delmonico or the flatiron that can sell for as little as $3.50 per package.

“We want to make sure that customers don’t lose their taste for beef,” Hoffman said.


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6 Replies
Honored Advisor

Re: Is beef turning into a luxury?

Have bought beef twice this past werk, and neither time was I shocked by the price...probably didn't bother to look actually. I was makng a pot roast for daughter's household while she was ubpnder the weather Wednesday.


Today, I picked  lean ground beef for chili tonight, and another pack for tacos later on in the week.  I tend to use more beef when feeding her family, and anything but, when the meal is just for Mike and me.  


My meat/poultry/seafood consumption has dropped to 2-4 ounces per day, most days.  Mike is probably double to triple that, since he eats an all- protein breakfast meal.


Those aggregate daily amounts combined don't make but one pound max.  In years gone by, we each would have easily had thst 16-ounce steak for supper.  This is not an economic decision for us.  I have been consciously putting in way more plant foods recently, and a person can only eat but so much in a day.


I think a lot of households are in a similar mode, so paying more for the meat we do eat isn't a hardship for us.  Looking at the spike in gasolne prices this past month, I can see where it may well become one for many Americans, though.  

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Senior Contributor

Re: Is beef turning into a luxury?

It is for us.  Can afford it but not willing to foot the bill.  Love steak but hasn't been one on the plate for more than a year.  Pork and chicken become the alternatives.  If she decides they are too expensive it might become tofu and peanut butter.  

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Senior Contributor

Re: Is beef turning into a luxury?

Say, all this talk about steak has made me hungary. My wife and daughter are out of town, so it is just me and my 2 high school boys. Think I will go to the high-end grocery store here in the Twin Cities and buy 3 thick-cut Prime Grade, not Choice, Rib-eye steaks for dinner tonight. Doesn't get any better than this, the women are out of town till tomorrow, so just the men at home, yes, steak, sports on TV, and cold beer. The best life has to offer!!!!!!! It is nice the women leave the men home by themselves sometimes!!!!!

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Re: Is beef turning into a luxury?

our government is turning us into a third world country so keep a close eye on your dogs and cats in the future

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Veteran Advisor

Re: Is beef turning into a luxury?

Our local grocery store had a meat sale going on last week.


Hamburger $2.69 a pound

Ground Beef, $2.89

Round steak (boneless) $3.29 a pound.


Yes, it has gone up, about 6-8 months ago, I could buy hamburger for $1.99 a pound, if I really watched for sales.


However Chicken, with the bone in, at $1.59 a pound might not be that much more of a bargain.   (maybe it would be, if I was more of a fan of chicken)

Pork is running 50 to 75 cents a pound, under beef, most of the time.

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Veteran Contributor

Re: Is beef turning into a luxury?

James22 sounds like it is a lot of fun to be at your house. You know you only live once and can't take it with you
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