News Column

Gas, Beef Prices Up Before Memorial Day Weekend

May 21, 2013
steak on the grill

The prices of two staples of the Memorial Day weekend -- beef and gasoline -- are jumping just in time for the holiday.

Wholesale prices of some grades and cuts of beef have reached all-time highs at the same time the region's gasoline prices have spiked 20 cents a gallon to nearly $3.90 a gallon at some area stations.

"I'm not going anywhere unless I have to," Erin Stapleton said while pumping gas at a Springfield station on Monday. "I'm staying local."

The wholesale price of choice-grade beef set record highs last week, and at supermarkets and grocery stores, the average beef price in March reached a record $5.30 per pound, surpassing the previous record of $5.15 set in November, the U.S. Department of Agriculture reported.

A multi-year drought in Texas and other top cattle-producing states and rising prices of feed have prompted ranchers to reduce the number of cattle in their herds to the lowest level in more than 60 years, the USDA has said.

Rob Hammann, owner of Hammann's Butcher Shop, Deli & Catering in Fairfield, said some beef prices are giving his customers sticker-shock. The increases have forced Hammann to think twice about filling his case with the traditional array of visually appealing -- but increasingly costly -- steaks and roasts.

"We have had to cut back on inventory a bit" because of the rising prices, Hammann said.

Like many retailers of beef, Hammann's has helped guide consumers who balk at the high prices of luxury cuts such as beef tenderloin, New York strips and T-bones toward less-expensive choices such as flat-iron steak, a slightly tougher but flavorful cut from the shoulder that benefits from a rub or marinade, Hammann said.

Steve Dillman, owner of Dillman Foods in Middletown, said prices of beef may ultimately lead to chicken and pork gaining market share -- as well as a greater proportion of the space in his grocery store's meat cases. But beef still has a following.

"I now sell steaks for higher than I have for a long time, although people are still buying them," Dillman said.

Kroger spokeswoman Rachael Betzler said Monday the Cincinnati-based grocery chain has not increased its beef prices. Large grocery chains such as Kroger lock in wholesale meat prices and are less vulnerable to short-term price fluctuations on the wholesale level.

Meijer spokesman Frank J. Guglielmi said rising wholesale beef prices are "typical when we approach a grilling holiday such as Memorial Day," and he added, "For the most part, Meijer customers will not see any dramatic shift in retail pricing."

Both Kroger and Meijer are planning Memorial Day weekend special offers on beef this week, Betzler and Guglielmi said.

Just getting to the grocery store is also getting more expensive. Southwest Ohio gasoline prices jumped 20 cents a gallon in the past week to an average price of $3.85 a gallon, while prices nationwide have fluctuated for no apparent reason.

One petroleum industry analyst struggled Monday to make sense of it all.

"The last seven days have delivered some shocks at the pump for motorists in the nation's Midwest," said GasBuddy.com Senior Petroleum Analyst Patrick DeHaan. "I don't believe I've ever seen gasoline prices in the Midwest surpass California -- areas of Nebraska, Minnesota, Oklahoma, North and South Dakota, and Kansas have done that. Gas price records in these areas aren't being quietly replaced, they're being blown out of the water.

"I don't believe I've ever seen such crazy trends in gasoline prices occur all at once -- prices spiking in one area, falling in another, and holding steady in others. What we're seeing today is certainly rare," DeHaan said.

GasBuddy's Dayton-area website, DaytonGasPrices.com, showed numerous stations charging $3.89 per gallon for regular-grade gasoline on Monday morning. The average price among all monitored stations was $3.84 a gallon. That's 20 cents higher than a week ago and 19 cents higher than a year ago, according to the website.

The AAA Fuel Gauge Report showed the average price of gas in the Dayton area was $3.87 a gallon, compared with $3.53 a gallon a week ago and $3.70 a gallon a year ago.

The national average has climbed 16.6 cents a gallon during the last month, GasBuddy.com reported.



Source: (c)2013 the Dayton Daily News (Dayton, Ohio) Distributed by MCT Information Services


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