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Meat Prices Expected to Keep Climbing in 2015

Image: Briaen Steele

A long list of proteins, including beef, pork and eggs, will be more expensive in 2015 -- after their prices already shot up in 2014. Sait Serkan Gurbuz / The St. Joseph News-Press via AP, file

Meat, it's what's not on the menu in 2015.

A litany of proteins, including beef, pork and eggs, will be more expensive in 2015 — after their prices already shot up in 2014 — putting them further out of reach of America's working poor.

"The need has increased. Food — even the food we buy for here — has increased, but the pay hasn't," said Kathy Pelletier, the food bank coordinator at the Gardiner Food Center at Chrysalis Place, in Gardiner, Maine.

Pelletier has been at the food bank for roughly three decades; in that time, she said there has been a shift in the people who walk through her doors. While she used to serve primarily seniors, single parents and the unemployed, today's customers are far more likely to be working families.

"Food went up, (heating) oil went up… everything went up except their wages," she said.

Oil and gas prices have dropped recently, which should provide some relief. But for many families whose income can't keep up with the rising cost of living, the grocery bill is often a primary pain point, said Jim Weill, president of the nonprofit Food Research and Action Center.

"The two things low-income people struggle with the most are getting fresh fruits and vegetables and getting protein, so when those items go up in price, that's a particularly problematic event," he said. "Whether you work or get public benefits, at this point, you have trouble getting by."

Last year, beef and pork prices shot up thanks to a perfect storm of drought, disease and demand. Conditions have improved but, at best, there's a long lag time — six months to a year-and-a-half — between production increases and lower prices, and experts say it's unlikely that price decreases will be passed along as quickly or as completely as increases have been.

"It takes a while… there's some stickiness to these prices coming down," said Steve Meyer, president of Paragon Economics.

Beef in a class by itself

As of November, pork prices were up roughly 10 percent from last year, according to the U.S. Department of Agriculture. The agency says it expects an additional increase of about 5 percent in 2015. Even eggs are more expensive: After a 7 to 8 percent increase in 2014, the price of eggs will tick up another percentage point or two in the new year.

And beef is in a class by itself: "Most retail beef prices, on average, are also at record highs, even after adjusting for inflation," the U.S.D.A.'s Economic Research Service said. It predicts beef and veal prices will end up with an 11 to 12 percent increase for 2014, and will rise by another 5 percent or so in 2015.

"Beef is becoming a luxury in the U.S. market at this point," said Altin Kalo, an economist at Steiner Consulting Group. "The days of simply going to the grocery store and buying a few steaks… those are going to be few and far between," he said.

What's causing beef prices to sizzle? 1:14

Kalo said beef prices will be 90 percent higher in 2015 than they were in 2009, and that will be the new norm for now. "We don't think there's going to be much relief in terms of beef prices," he said.

Karl Robillard, senior manager of communications and public relations at the St. Anthony Foundation in San Francisco, sees this firsthand in the soup kitchen the organization runs. "The last time we bought beef was for St. Patrick's Day because it's just too expensive," he said via email. "This means we serve more stews with less meat and more vegetables and beans." Diced beef turns up just once or twice a month, often in stews to stretch it as much as possible.

It's the same story at St. Anthony's food pantry. "Clients are always looking for meat," Robillard said, but rising prices have curtailed donations. "Protein is by far the most popular pantry item… When we don't get enough, we have to ration the groceries and give people more beans."