CHICAGO – Americans choosing backyard cookouts over driving getaways this Labor Day weekend are finding the cost of beef may set them back just as much at the supermarket as the high price per gallon at the gas pump.
While consumer demand for beef remains strong, the barbeque favorite was taken off the menu at this weekend's Sincox family cookout because it was too expensive.
"I started doing the shopping and found the meat alone would set us back $400," said Elizabeth Sincox, who was planning to supply beef ribs and hamburgers for about 60 guests at her home in the Chicago suburb of Barrington, Ill. "The costs were just astronomical for all of those people."
So, instead of beef, the guests will be eating chicken and pasta.
In Chicago, a package of two rib-eye steaks (search) costs $12.50 and a half-pound package of filet mignon (search) $7.15. In Washington, T-bone steaks (search) are $4.99 a pound, whereas in Denver, they cost $5.99 a pound with a store value card, or $7.99 without the card.
If those prices seem high, it's because they are.
For example, U.S. Department of Agriculture (search) data showed beef prices at supermarkets averaging about $3.65 per pound in June and July. That is a record high for any month, said Jim Robb, director of the Denver-based Livestock Marketing Information Center (search).
"I suspect the August price will come in at new record level, reflecting the very high wholesale prices," said Robb.
Despite its high price, beef should still sell well this holiday weekend, which is considered the last major cookout opportunity of the summer.
"It has been surprising how strong consumer demand has been for beef," said Robb. "I don't think the current prices at retail will be a big deterrent."
Strong sales at supermarkets and restaurants this summer are a major reason that prices are so high. As the economy recovers, consumers are dining out more. Also, they are willing to treat themselves to more expensive menu items, such as steaks, when they eat out or eat at home.
"The story I hear over and over again is folks can't afford to go out and buy a new car, but they still make that date to go out and have a nice steak in a nice restaurant," said Gregg Doud, chief economist for the National Cattlemen's Beef Association.
While strong consumer demand has helped push up beef prices, other factors have also contributed.
In May, the United States banned imports of Canadian beef and cattle because of a case of mad cow disease there. That ban caused a marginal reduction in the beef supply here.
Top beef buyers Japan and South Korea, also banned Canadian beef and bought more U.S. beef.
As a result, U.S. beef supplies became tight and prices went up. Wholesale beef prices are again approaching record levels, after setting a record earlier this summer.
While beef prices are high, Doud told consumers not to be discouraged.
"You are going to have to probably shop a little harder, but there are still some great values out there at the meat counter related to beef versus other products," he said.