What A Burger
Earlier this week, I found an interesting article on ground beef in BEEF Magazine written by Lee Schulz. Schulz had written about the costs, source and current supplies of ground beef.
Many of those in the beef business and ground beef consumers probably take ground beef for granted. For the consumer, until last June or so when the meat shortage appeared in the grocery stores, ground beef was the go-to meat product. Ground beef is quick to prepare, cheaper than other cuts and everyone has the confidence to cook it correctly. It is not like a steak or a roast where one has to somewhat prepare it to cook. It is comfort food to most consumers.
The article Schulz wrote in 2020 stated the ingredients for a home prepared, quarter-pound cheeseburger totaled $1.84 per cheeseburger. He said this figure is based on the U.S. Department of Agriculture (USDA) Economic Research Service calculations using data from the U.S. Bureau of Labor Statistics.
The article says ground beef was the largest cost at $1.03, the cheddar cheese was 34 cents, the bun was 18 cents, lettuce was six cents and the tomato was 23 cents. Beef prices rose in 2020 because of the pandemic, to eight percent higher than in 2019, which was an eight cent per burger hike.
In 2020, U.S. ground beef consumption was estimated at just over 27 pounds per person, which is more than 46 percent of the total U.S. retail beef consumption.
We all know ground beef comes from the trimmings of the beef carcass. Generally one gets 50 percent lean trimmings from a fat steer or heifer and 90 percent lean trimmings from cull cows and bulls.
The trimmings from cull cows and bulls are important to beef producers, as they dictate the price the producer gets for these animals, and it is an important part of the producer’s yearly income. As this income is important for cow/calf producers, it is equally important to those in the diary business. Trimmings drive the market for those cull cattle.
The huge demand for ground beef is also what drives beef imports. Lean beef from other countries is mixed with U.S. tallow for ground beef. While U.S. beef producers dislike beef imports, it does drive up the market for the U.S. beef tallow, but it is a better deal for meatpackers.
Some are predicting a rally for beef this spring. Meatpackers are making profits on the boxed beef sector and they are finding beef products are moving at a good rate. This tells us the meatpackers will need cattle and will likely pay more if these boxed beef prices keep trending higher – and it looks like they will. As it looks now, the owners of finished cattle will be pushing the packers for even more dollars.
Cattle producers will then wonder how long this rally will last. They hope it will last long enough to reach summer video sale season, when the calves and yearlings sell. We can only hope as restaurant and foodservice opens up more that people will want a good ol’ steak or cheeseburger to eat.
But remember, ground beef is like beer – people love it during the good times and also during the bad times.