Why Is Beef So Expensive 2017?

2017 Retail and Wholesale Beef Prices

Following unusual price relationships from record-high prices in late 2014 through early 2016, the wholesale beef product markets are still adjusting.

Prices for “all fresh retail beef” were $5. 833 per pound (lb. ) in July, up 1. 0% year over year. Since January, this price category has increased each month.

July Choice beef prices were $6. 10 per lb. , down from the June level of $6. 207 per lb. , but fractionally higher than July 2016.

In July, the price of all fresh retail beef was higher than the price of broiler composite retail. Retail beef to broiler prices are currently at the record level set in July 2015. Similar to the beef-to-broiler retail price ratio, which is holding steady at levels well above historical ratios prior to 2014, the retail-beef-to-pork price ratio is holding steady at levels close to the record during the high prices of 2014 into 2016.

Over the last two months, wholesale cutout values have fallen precipitously, with Choice cutout values falling to a weekly average of $197. 66 per hundredweight (cwt. after reaching a stronger-than-expected seasonal peak of $250 in mid-August 86 per cwt. in mid-June. Due to plentiful supplies and the summer’s heat, choice beef prices have had a difficult time finding a bottom. From late April until last week, the weekly Choice cutout values on average were higher than last year.

Additionally, from January to a weekly seasonal peak of $224, certain cutout values increased. 54 per cwt. in mid-May before dropping to last week’s $194. 81 per cwt. This year, the Choice-Select spread increased from a seasonal low of $1 and showed an accentuated seasonal pattern. 25 per cwt. in mid-February to an impressive $30. 38 per cwt. in the second week of June. Since the market turmoil brought on by the bovine spongiform encephalopathy (BSE) in October 2003, this was the highest weekly Choice-Select spread. The Choice-Select spread has decreased back to a narrow $2. 25 per cwt. in mid-August.

The dramatic seasonal Choice-Select spread pattern appears to be primarily a reflection of the fluctuating demand for Choice beef, which was surprisingly strong in the spring but has recently been struggling. According to wholesale beef product values, middle meats have recently deteriorated the most, with rib and loin values falling relatively more than chuck and round values. Choice ribeye prices rose to a pronounced seasonal peak in June, far above levels from a year ago, but have recently decreased to levels from a year ago. Choice tenderloin and strip loin wholesale prices have fluctuated from year-ago levels by plus or minus throughout the year, but have recently decreased. In recent weeks, chuck and round values have generally increased year over year.

The ground beef market has been quite volatile this year with 50% lean fed trimmings exhibiting an unusual and pronounced spike in May before returning to year-ago levels recently Lean (90%) trimmings followed year earlier levels through late April before rising sharply higher year over year for the past several weeks

Longer term, markets for wholesale beef products are still adjusting in the wake of peculiar price relationships that surfaced during the record-high prices from late 2014 to early 2016. During this time, many lower-value products saw an increase in comparison to middle meats, but in 2017, these price relationships are returning to more normal levels. During this time, prices for chuck, round, and sirloin products rose relative to those for loin and rib products. The Choice-Select spread decreased during the record price period but, as mentioned above, it has at times in 2017 increased back to nearly record levels. Looking back, the last five years offer a useful case study to better comprehend the complexities of beef demand and product substitution, as well as the interaction between beef and other meats in the context of a volatile meat market.

Specialist in livestock marketing at Oklahoma State University Extension is Derrell Peel. He wrote this article for the Aug. 21, 2017, edition of the Cow-Calf Corner newsletter. It is reprinted with permission.

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FAQ

How much was a pound of ground beef in 2017?

Average prices for All uncooked ground beef, per lb. ( 453. 6 gm):YearAverage price (Ground beef)Inflation adjusted price (2023 dollars)2017$4. 12$5. 152016$4. 25$5. 292015$4. 63$5. 222014$4. 30$5. 19.

Why have beef prices gone up so much?

Extreme drought struck the United States in recent years, forcing farmers to sell cattle quickly because it was either too expensive or impossible to maintain their herds in such dry conditions. This year’s supply issues are a result of the wave of sales, particularly of breeding cows.

Will meat prices go down 2023?

Beef and veal prices are predicted to increase 1. 6 percent in 2023, with a prediction interval of -2. 5 to 6. 0 percent. Prices for fish and seafood fell 0. 8 percent in May 2023 and were 1. 1 percent lower than May 2022.

Why is beef so expensive right now 2023?

Since the beginning of December, winter weather has brought some much-needed moisture to much of the United S. remains under threat of drought conditions for 2023. The winter weather has made it difficult for packers to secure cattle, which led to a decrease in cattle slaughter last week and an increase in beef prices.

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