I don’t like my weekend being ruined by work, and especially bad news. But I knew it was coming, and had asked Quality Control to alert me when it did. As I began to look at our database, my heart sank. You have to understand that I’m not just a grocery savings expert. I’m also a mom.
It’s not just one food category that I’m worried about. I saw numbers across all categories all over the country, a 16% increase in the sale price of olive oil and a box of Cheerios now goes on sale for what used to be the regular price three months ago. But, that’s not why Quality Control alerted me. It was so much more that caused my heart to sink into the pit of my stomach.
But first, some background, on why this is so…
Due to extreme on-going drought (the worst since the 1930s), grazing land in the US has all but dried up. Followed by increasing costs for feed (due to droughts and demand), ranchers have sent cattle to market early, reducing the herds to the lowest they have been in 60 years.
In March of 2012, I reported:
“Beef already reached record highs in 2011, up 10% from 2010. More meat is now projected to reach record prices in 2012.” Did they? Yes, and no. Some beef prices rose around the country. But the un-expected sudden culling of herds caused the market to be flooded with extra beef, which kept prices pretty constant, even dropping in some areas.
Now, for 2013, the USDA predicts a 4-5% increase in meat prices. Before you get comfortable with that, be advised that according to our databases, the USDA’s food cost increase projections are always extremely conservative. Most experts fear worse, even as much as a 20-25% increase in beef prices. On Jan. 11th, we anxiously awaited the USDA crop report, and I tweeted this valuable insight, “… Peter Meyer previews crop report with Pimm Fox Bloomberg.” See the video here: Pimm Fox Bloomberg
The USDA crop report was shaky as expected, and projections for 2013 have not been good. On Jan. 15th I tweeted: “Beef cattle decline likely to boost prices at the supermarket this year and maybe into 2015 – The Gazette – Idaho“
Last week, grocery prices rose significantly on countless food items in nearly every category. Did you notice? And did you notice anything earth shattering in the meat department?
Our databases show it all over the US… But…
Ironically, the worst one of all was right here in my own back yard, a 133% increase as compared to January 2012. It started two weeks ago, when the sale price of Top sirloin steak at Vons SoCal jumped by 72% (Jan.3, 2012: 3.47 to Jan. 12, 2013: 5.99). Only days ago, there was yet another 16% increase (5.99 to 6.99). From Jan. 2012 at $ 2.99 to Jan. 2013 at $6.99, that top sirloin has more than doubled in a year. I’ll say it again… 133%.
Not far behind, Ralphs last week, also in California, upped the sale price of Top Sirloin Steak from 3.77 to 8.49, a 125% increase.
CA wasn’t the only place hit by any means. Price jumps were all over the map. A few examples:
At Albertsons TX, Beef T-Bone Bone-In Steaks JUMPED from 7.99 lb in 3/12 to 11.99 lb in 1/13. (50% increase!!!!)
At Fry’s AZ, Fresh Ground Beef 73/27 (sold in a 5 lb roll) was 14.95 in 2/12. Now it is 17.45. (16.72% increase)
At Albertsons OR, Albertsons Boneless Beef Round Tip Roast went from 4.99 lb on 1/11/13 to 5.49 lb on 1/18/13 (10% increase)
At Harris Teeter NC, HT Rancher Beef Boneless Ribeye Steaks went from 11.99 in 8/12 to 12.99 in 1/13. (8.34% increase)
At BiLo NC, Gold Star Certified Angus Beef Cubed Steak went from 4.78 lb in 6/12 to 4.99 lb in 1/13. (4.39% increase)
Switch to chicken. Chicken already rose in 2012, and the supply has since been increased. But don’t get too comfortable with choosing chicken. As consumers switch to chicken, chicken may rise again.
Other categories of food have been projected to rise. According to TheGroceryGame.com databases this snowball effect is already upon grocery items in every department.
Some good news… The price increases we see nationwide, and the pricing cited here, will most likely adjust and we will probably see better meat sales for special events, like Super Bowl, for example. Additionally, through out the year, we should also see lower sale prices as loss leaders, which are those promotions to drive traffic into stores. But over all, we do know that meat has indeed gone up, and may go up more this year and next.
The bottom line…
The only defense against high meat prices will be to stock up on sales.
Now is the time to invest in a deep freezer.