NEW YORK (The Street) --Beef prices, which have been rising steadily for over fourteen months, will begin to fall in the next several months, said Todd Simon, Senior Vice President at Omaha Steaks.
The last year's price increases reflected decreased beef supply, but that's about to change.
"The market was hit a couple of years ago with high corn prices, and then there was some drought issues, and ranchers cut back," according to Simon.
"Now as prices are increasing, ranchers are bringing more beef to the market. So we'll start to see probably in the next several months prices go down a little bit," he added.
Noting that it generally takes 18 months to bring beef to the market, Simon said Omaha Steaks buys in large quantities and buys in advance, which gives the company an advantage on pricing. The company is trying to keep prices stable for consumers, he said.
There has been higher demand both domestically and around the world for beef, said Simon, adding that Omaha Steaks is a relatively small player but in the high-end market the company is seeing good demand from its two million customers.
Almost all of Omaha Steak's current business is domestic and direct to consumer, although it does sell internationally on an opportunistic basis. Simon said international markets might be a potential area for growth, but the company would have to navigate through the many political issues surrounding beef exports.
He said he hasn't seen any increase in the business from consumers shying away from poultry after bird flu outbreaks, but noted that seasonally, the summer is a period that typically sees increased demand for beef.
While steaks have been the mainstay of the business for a long time, Omaha Steaks is building out its burger business and has even added non-beef burgers to its offerings, which, according to Simon, has seen sales pick up as consumers look for value.