NEW YORK (MainStreet) Consider perfecting a beer can chicken recipe this summer since beef prices are expected to remain at an all-time high during the grilling season and into the rest of the year.
Extreme weather from a drought two years ago has thinned the nation's beef cattle herds to levels last seen in 1951 when there were about half as many mouths to feed. Global demand for U.S. beef has also pressured prices to rise for an already existing short supply of beef.
The retail value for "all fresh" beef jumped to $5.36 per pound in March from $4.91 a year ago, a 9% increase, according to data released by the U.S. Department of Agriculture on April 15. The USDA reports that the price of beef per pound is at its highest in almost 30 years.
"Where we are now is in the apex of the high and starting next year supplies will start to grow and of course demand for beef at higher prices will be challenged," said Shawn Hawkett, president and CEO of Hawkett Financial Advisors, a brokerage that specializes in agricultural commodity trades. "My belief is that 2014 is the peak of cattle demand."
U.S. beef consumers can expect prices to remain high with the current surge of demand and shortage of supply until some prices breaks start to happen in 2015. he said.
"Beef prices should remain at an all-time high this year and into next year," said Ricky Volpe, an economist at the USDA.
The market had to go up, because there isn't enough beef to support demand. Other meat producers, such as hog farmers and poultry producers, will benefit from the shift in demand to cheaper protein alternatives, said Volpe and other food commodity experts.
Still the savings may be limited with the alternatives.
"All the meats are high -- they all tend to run up together and come down again," Hawkett said. "Hog prices have also hit record highs."
The USDA is predicting pork prices to rise by 2 to 3%, so switching to pork ribs still carries a higher sticker prices at the grocery store. The price of retail pork rose to $3.83 per pound in March from $3.51 from last year at the same time, reflecting a 9% increase in pork prices.
"On comparative bases, beef is the most expensive," Hawkett said. "If someone is look at their food budget for the week or the month, beef is going to be the one that jumps off the page."
The higher cost of beef has started to cause some restaurants and food chains to consider raising prices. The famous Denver-based burrito chain Chipotle Mexican grill announced last week that the higher cost for beef is one of the food costs pressuring the chain to raise its menu prices later this year.
Other restaurants that serve up large quantities of beef, whether steak or slow-cooked beef brisket, are resisting pressure to hike up menu prices.
The Hill Country Barbecue, a barbecue restaurant with locations in New York and Washington, D.C., has refrained from raising its menu prices despite the fact that beef is one of its biggest expenditures.
"Beef is a huge cost for us -- one of our biggest single costs," said Alexis Lenhardt, a spokeswoman for Hill Country Barbecue. "We haven't raised prices, but it's been a challenge."
The Texas-style barbecue chain has shaved costs elsewhere in its operations to avoid passing the price on to its meat loving patrons, Lenhardt said.
"Looking to raise prices would be the last resort for us, so we've been able to avoid thus far," said the Hill Country spokeswoman. "But, we have certainly felt it,"
Hawkett says this year is set to be the toughest for barbecue restaurants and steak houses in terms of both inflationary pressure for food costs and the higher beef and pork prices.
"They're really going to have to suffer before they start to get some price breaks in 2015 and certainly in 2016," said Hawkett. "The good news is we are likely to see a perpetual lowering of the cost over the next two to three years."
The rising cost of beef and pork prices is expected to impact upcoming barbecue competitions and cook-offs.
"I don't think they'll quit eating beef or pork," said Caroline Well, director of Kansas City Barbecue Society, the largest organization in the U.S. for barbecue enthusiasts. "They will just do smaller portions unless it gets...worse."
The worst of skyrocketing beef prices is happening now and possibly into the summer months, according to commodity experts.
"My expectation is we're likely setting a major top, a bubble top, that may not be seen again in a decade or two," Hawkett said.
--Written by Farran Powell for MainStreet