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Retail Beef Prices Drop to a Five-Year Low

Consumers: Trade group credits high production and low cattle prices for the trend.

May 27, 1996|Associated Press

DENVER — That Memorial Day cookout will be a little cheaper this year.

Retail prices for hamburger, steak, roasts and other beef products are at their lowest levels in five years because cattle production is at a 10-year high and cattle prices are at a 10-year-low, according to the National Cattlemen's Beef Assn.

"Consumers will have the opportunity to have some very good buys over the next six to 12 months," said association economist Chuck Lambert.

The average price for six cuts of beef was $3.01 a pound in April, compared with $3.19 a pound in April 1991, the association said. Regular ground beef, the cheapest cut, was $1.40 a pound. T-bone steak, the most expensive, was $5.77 a pound.

On Memorial Day, the largest beef-consumption day of the year, Americans are expected to consume about 64.2 million pounds, about 25% more than the average daily consumption, the association said.

Kroger Co., one of the nation's major grocers, has cut its beef prices to the lowest levels in at least seven years, spokesman Paul Bernish said.

"When you have prices like that, we're certainly seeing an increase in meat department sales," he said.

The low prices come as Americans are consuming more beef than has been the case in recent years. U.S. Department of Agriculture figures indicate that annual beef consumption totaled 67.5 pounds per person last year, up from 65 pounds in 1993, but down from a high of 95 pounds in the 1970s.

But what's good news for consumers isn't for cattle producers. They are struggling to survive their toughest market in a decade.

In addition to a large supply of cattle, producers have suffered hefty increases in feed prices and a lack of sufficient summer grass in many areas of the country.

The number of cattle in the United States was 103.8 million head at the end of 1995, compared with 95.8 million in 1990, Lambert said.

Fed cattle prices averaged $66 per 100 pounds in 1995, compared with $78 in 1992. Beef production totaled 25 billion pounds in 1995, up 11% from 1994, he said.

One bright spot for cattle producers, however, has been the export market. Beef exports have been increasing steadily and imports have declined.

Japan is the largest buyer of U.S. beef, taking $2.1 billion worth last year. Canada is the second-largest export market, taking $373 million worth of beef in 1995. Other lucrative markets are South Korea and Russia, said Rod Manuel of the U.S. Meat Export Federation.

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