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Teri's Blog

Food Prices on the Rise: Beef up as much as 28%

Posted By: terisblog on March, 24 2014

Costco Whole Chicken 1.19

Meat costs are up. Beef already went up by an average of 4% in January. The Agriculture Department expects grocery store prices to increase as much as 3.5% in 2014, up from 0.9% last year according to USA Today.

California’s drought has been a nightmare for farmers in the central valley, where 11% of US food is grown. Additionally, unusually cold weather in CA and citrus greening disease in Florida has already shown marked increases in the cost of produce nationwide.

The beef industry is still suffering from the lag of culled herds due to droughts in mid west grazing lands, and in turn, poor feed crops in the north.

Restaurants tend to pass on the cost of wholesale food price increases to consumers, where grocery retailers hold back longer from passing on these higher costs. *Databases at show dramatic increases in the cost of beef, pork, chicken, and fish, in January. The increases are on the original price or the sale price or both. Here’s just a few examples for beef:

AZ Fry’s – USDA Choice Boneless Beef Chuck Roast

Since 3/30/12 – $5.99 lb, sale BOGO (buy one get one = $3/lb)

2014 – 1/2/14 – 6.99 / 2.99 (16% increase in original price)

1/20/14 – $6.99 lb, sale 4.69 lb – and up we climb on sale prices…

2/7/14 – $6.99 lb, sale 4.79 lb

2/21 – $6.99 lb, sale 4.99 lb

2/28 – $6.99, sale 50% off (3.49 lb)

3/21 – 6.99 / 3.49 – this is the new sale price – 16% increase in regular and sale price will probably remain through 2014.

CO King Soopers – King Soopers T-Bone Steak

Since 2/8/12 – 9.99 lb, 6.99 lb

1/30/13 – 11.99 lb, 6.99 lb (9% increase in regular price)

2014 – 1/8/14 – 11.99 / 8.99 (over 28% increase in sale price)

With market share shifting from traditional grocery retail models to smaller version roll outs and dollar stores, price conscious consumers have more to consider.  Each grocery retailer tends to be strong in particular categories, but shift from week to week. Meat is simpler. As of now, the featured “loss leader” meat on the front page of the supermarket circular for chicken, beef, pork, and fish are still most often lower than the every day low prices at the smaller version stores and even warehouse club stores. Example pictured: Costco Foster Farms chicken varies from 1.19/lb to 1.29/lb. Supermarkets in areas that Costco serves regularly have sales on Foster Farms chicken from 79-99 cents a pound. In other areas of the country, such as where Perdue chicken is sold in the northeast, and elswhere, supermarket sales offer the best price over club stores and specialty stores like Trader Joe’s.

*Pricing data contributed by The Grocery Game, Inc.

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