How Will the Worst Drought in 50 Years Affect the Price of Beef? — Dollars and Sense
Beef lovers will soon feel the effects of the worst drought in 50 years as the price of meat rises sharply in the coming months. The ongoing drought gripping two-thirds of the country has caused crops to wither and sent the cost of feed soaring. Experts say this will cause meat prices to skyrocket.
Ground beef alone could jump to $2.88 per pound, a whopping 4 percent increase from last year, and sirloin could cost as much as 25 cents more per pound, rising to an average price of $6.47.
Experts say the reason for the increase is simple. As feed crops like corn and soybean die due to lack of water, the cost of raising an animal to maturity increases.
"Field corn becomes feed, and as the price of feed goes up, the price of animals, and animal prices, all go up," said USDA research economist Rick Volpe.
The drought will likely cause chicken, eggs and dairy to increase as well. The cost of chicken could jump by 5 cents to $1.34 per pound, eggs are expected to increase by 1 or 2 cents per dozen and whole milk will rise to $3.66 per gallon.
Some foods that contain corn and soybean will increase too. Margarine could jump to $1.91 per pound this year and peanut butter could hit $2.18 per pound. In fact, the cost of both has been steadily increasing over the last year because of the drought and production problems in South America. Peanut butter, for example, rose by a staggering 42 percent last year.