Their high cost isn’t stopping shoppers from grilling beef and chicken for their Memorial Day holiday events, but they may not be buying all their favorite cuts.
Joe Moore, executive vice president of Indiana Beef Council, said with beef prices at record highs many consumers are switching to less expensive cuts or different meats. However, he said consumers should expect sales on beef for the holiday.
“Retailers beat each other up for holiday shoppers, use steak and ground beef to get people in their stores,” Moore said. “Regular retail prices are as high as I can remember, but promotional prices are as good or better than ever.”
Like turkey sales at Thanksgiving or ham at Easter, beef becomes a loss-leader during the summer holidays.
“We’re seeing very strong ground beef sales,“ said Joe Kolavo, vice president of perishable operations for the Highland-based Stack & Van Til chain. “Steaks do very well when we advertise. If they’re not advertised, people go with less expensive options.”
The chain of 19 Strack and Van Til, 16 Ultra and two Town & Country stores has steak promotions from Memorial Day to Labor Day as has been its pattern, Kolavo said.
“We promote certified Angus beef and USDA choice beef,” he said. “That’s the focus in our stores. While price is an issue with the cost of beef – with not a lot of relief in sight – we’re doing our best to sell at competitive prices while not reducing the quality. Customers still want a quality product.”
The most recent Weber GrillWatch survey says 70 percent of the 1,000 respondents claimed hamburger as their top choice among the foods grilled most often. Steak, hot dogs and chose chicken came in next.
A United States Department of Agriculture survey indicates the average retail cost of a pound of ground chuck was $3.48 a pound in April compared to $3.25 a pound in April 2011.
Beef prices at the wholesale level are up, but that’s “typical when we approach a grilling holiday such as Memorial Day,” said Frank Guglielmi, Meijer director of public relations.
“As a privately-held company, Meijer has the flexibility to invest in pricing and keep prices low for our customers, absorbing any short-term reduction in margin,” he said. “Meijer customers will not see any dramatic shift in retail pricing.”
Chicken, once a cheaper alternative to beef, currently is selling at record wholesale levels.
The wholesale spot price of whole chicken was $1.0425 a pound in last month compared to 95.84 cents a pound six month earlier, according to the Commodity Price Index.
“Chicken cost went up their highest last year in five years for the same reason as other proteins,” Strack’s Kolavo said. “It’s not the cheap alternative it once was.”
He suggests grilling boneless pork chops as an alternative to beef.
“Pork’s percentage of business is increasing with the increase in beef prices,” Kolavo said. “Hams are an outstanding meal option in affordability and their popularity has grown significantly even when there’s no holiday. Turkey is also a great meal option.”
Beef costs are up because of the high demand for beef in the United States and the growing demand from Japan, Korea and Russia coupled with low beef production due to draught of 2012 and the shortage of feed corn.
Chicken and pork prices also rose for the same reasons.
As of Jan. 1, cattle and calves in the U.S. totaled 89.3 million head, a 2 percent reduction from 90.8 million a year earlier, according to the USDA.
“All that affects prices here,” Moore said. “We’re competing with the world for our own beef. It’s a supply and demand thing.”
Moore doesn’t expect the cost of beef or other meats to decline anytime soon .
“From an industry standpoint, we hope more beef is going into the system,” he said. “It takes a long time, two years, for herds to grow. That’s what it will take for beef prices to come down.”