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Cost of Beef Keeping Burger Prices Up – Maybe Forever!

If you thought Fast Food burger prices are still too high, you’re right. But there appear to be valid reasons that don’t involve price fixing. All the major burger slingers are being bashed by a combination of economic factors pushing burger prices higher…

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It’s not because the resto chains are price gouging. In fact, they’re involved in a two-front war. On one hand, they’re trying to deal with record-high beef prices. On the other, they’re trying to meet blister-ing competition from their peers on the ‘Value Wars’ front.

As we reported yesterday, one traditional solution – the brute force, all-American ‘sue them into submission’ approach – is being aggressively pursued by burger behemoth McDonald’s, against the meat packing industry. But the meat packers may not really be to blame…

Sector in disarray

We’ve heard a lot about the fast food chains trying different approaches to offer better value for the buck to their fan bases. McDonald’s started the whole thing earlier this year, promising a bigger, bet-ter value burger to headline it’s main menu. The new Big Arch premiered a few weeks ago to mixed reviews. As of today, the burger sector remains in a state of disarray and instability not seen in recent decades.

Fast Food operators are also being pushed from another direction in a growing number of US juris-dictions by minimum wage increases that have been phasing-in since the beginning of this year. Fast Food wages that were in the range of $7 to $12 an hour last year have risen to over $20 an hour in some places.

Beef prices the key factor

But it’s the rising price of beef that’s specifically pushing burger prices – and keeping them high. This in spite of the recent plateau in overall inflation, and a slight decline overall in food prices.

Beef-specific environmental and economic factors have woven themselves into a lose-lose web that’s pushed prices to an all-time high.

Extreme environment

The environment hasn’t been cooperating at all with food growers or ranchers over the past few years – say, the post-COVID era, in general. Several consecutive years of unprecedented drought, rising produces directly, and the cost of meat indirectly, through higher feed costs. Livestock feed is also in shorter supply than it traditionally was, before 2020, and that’s compounding the situation.

Cattle herds are being culled because ranchers can’t sustain them at previous levels. In fact, US beef cattle numbers hit a 73-year low over this past summer.

Economic complications

Partly as a result of the effects of the environmental onslaught against livestock raising, family beef operations are closing. The next generation doesn’t see a future in carrying on the tradition. The average age of beef ranchers in the US today is 58. And rising.

Costs for fertilizer to grow livestock feeds are still high and transportation costs, to get the product from one ‘station’ in the supply chain to the next – particularly for fuel – are also high.

My take

All these factors are contributing to beef shortages, which are keeping prices high. And observers are increasingly expressing agreement that prices may never again come down to levels the masses will feel comfortable with.

So… It’s not really surprising that the average price of a Fast Food burger has risen by more than 16 percent over the past 5 years.

The result? Even a Fast Food burger may soon be considered a luxury. And a roast or steak, a rare treat – only for a special occasions.

And that’s just another stage coach stop along the hot, dusty trail from pre-2000 food sphere ‘busi-ness as usual’, to the big shift from animal to plant-based protein I and others food writers have been warning about for more than a decade…

~ Maggie J.

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