The price of wholesale beef hit an all-time high Friday just as the spring grilling season heats up.
The U.S. Department of Agriculture on Friday reported the wholesale price for choice beef, commonly called the cutout, at $201.68 per 100 lbs., eclipsing the previous record of $201.18 set on Oct 16, 2003.
The record-high prices could mean a sharp increase in retail prices as supermarkets prepare for Memorial Day Weekend, which ranks third in weekly beef retail sales at about $370 million, according to Reuters.
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"We've not yet seen the big demand push we normally get by this time of year because of weather issues. But the cutout surge suggests a kick-start for grilling, Mother's Day features and Memorial Day bookings," Don Roose, analyst with U.S. Commodities in Des Moines, Iowa, told Reuters.
The U.S. cattle and calf herd is at its lowest level since 1952 thanks to a prolonged dry spell in the U.S. southwest, which followed a historic drought in the Plains and damaged pastures. The lack of moisture drove up feed costs and shrunk the herds.
Foreign markets are also tapping into the U.S. meat market, increasing domestic prices.
"The public will adjust to it, like they have for $15 movie tickets," Jim Early, the founder and president of the North Carolina Barbecue Society, told NBC News.
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Tyson Foods on Monday said it sold 3.9 percent less beef in the quarter that ended March 31 compared with a year ago. Its beef prices went up 6.5 percent over that same period, the company said. "Consumers," Tyson said in its quarterly report, "opted for the relative value of chicken."
Hamburgers are still the No. 1 choice when grilling though, according to the annual Weber Grillwatch Survey.
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