Thursday, April 10, 2014

The "There Is No Inflation" Report: Beef Prices Hit All-Time High in U.S.

LaTi reports:

Come grilling season, expect your sirloin steak to come with a hearty side of sticker shock.
Beef prices have reached all-time highs in the U.S. and aren't expected to come down any time soon...

The retail value of "all-fresh" USDA choice-grade beef jumped to a record $5.28 a pound in February, up from $4.91 the same time a year ago. The same grade of beef cost $3.97 as recently as 2008.
The swelling prices are roiling the beef supply chain from rancher to restaurant.

Norm Langer managed to go two years without raising prices at his famed Westlake delicatessen.
But last week, he reluctantly began printing new menus showing a 50-cent increase for sandwiches at his 67-year-old restaurant.

Langer accepts it's one of the perils of business when your bread and butter happens to be corned beef and pastrami. But he fears he may have to raise prices again, driving away customers.

"No beef, no delicatessen. That's the bottom line," Langer said after a typically frenetic lunch service. "Jewish delis aren't vegetarian, they're based on corned beef and pastrami. Things are beyond my control. With the price increase, I hope my customers are tolerant."

Langer said beef prices are the main reason his wholesale food costs have risen 45% in the last two years...

The biggest fast-food chains aren't immune to the price pressure either. Experts say $1 value menus could soon be a thing of the past.
In October, McDonald's said its Dollar Menu of more than a decade would morph into a so-called Dollar Menu & More, which mixes $1, $2 and $5 items. Wendy's made a similar move last year.
Yum Brands Inc., which owns Taco Bell, said in December that it expects 4% price inflation for beef and other meats in 2014, though the company didn't indicate whether the costs would be passed on to consumers.,0,2966247.story#ixzz2ySerO2uN

1 comment:

  1. Krugman and the econometricians still aren't happy.

    The latest tweak to the cpi algorithm will substitute dog food for beef under these conditions and dog food price increases are still stubbornly holding to less than the econometricians' 2.4% per annum targeted level. I think they need to turn the spigot all the way to 11 on that Phillips' Curve Machine.