If your plans for this weekend include barbecuing a platter of pork chops and sizzling some steaks, get ready to pay up: Meat prices have skyrocketed nearly 10 percent compared to this time last year.
Oddly, the rising prices come at a time when feed costs have fallen dramatically, which should bring meat prices down. Feed costs are markedly lower—almost $3 less—this year than they were last year, when they were noticeably up from a drought the year before. Yet shelf prices are still high.
Additionally, two factors that might seem like likely culprits—the drought affecting the western United States and an E. coli recall on beef—both haven't had much of an impact. The drought will likely raise meat prices down the road, but that hasn't happened yet: Feed and meat prices are set far in advance in the futures market. Last year was a good year weather-wise, so this year's prices remain unaffected. As for the E. coli scare: You'd think that the meat industry would be hard-pressed to sell beef to shoppers, bringing prices down. But consumers seem to be shrugging it off, and demand hasn't fallen.
So what is causing the spike in meat prices? The answer is consumers.
“Consumers are feeling better about themselves and their income situation and willing to pay up for good meat,” says Bob Young, chief economist at the American Farm Bureau Federation. But, he says, there aren’t enough fancy cuts of meat to satisfy all the people who want them, which means grocery stores can hike up prices.