Beef prices spike in time for July 4th grills

CHICAGO - Millions of Americans are celebrating the Fourth of July around the BBQ, but the cost of the burger or steak they're throwing on the grill has spiked since last year's party.

Beef prices have gone from $4.88 a pound last year to $5.45 this year.

If you have a beef with the rising price of meat, a trip to the LJ Ranch in Logan, Kansas, may be instructive.

Beef prices have gone from $4.88 a pound last year to $5.45 this year CBS News

"We have the lowest amount of cow numbers since 1952, and so our cow numbers are down drastically," rancher Lloyd Schneider said.

Down drastically because of a combination of factors, beginning with the grass.

"When the drought hits us, our grass does not grow to the extent that we are accustomed to," Schneider said.

A drought means the calves do not mature as fast CBS News

Calves don't mature as fast on drought-stricken pastureland, and the prolonged winter slowed the growth of grain to fatten them up.

But there's another reason for the lack of domestic beef.

"We're also exporting more to other countries and so the demand for beef is stronger," Schneider said.

The USDA is projecting retail prices for beef will rise as high as 6.5 percent this year compared to just 2 percent last year.

The Northwest Meat Company in Chicago is on the supply end of the equation, providing meat to local hotels, restaurants and country clubs.

Some of the rising costs are being passed on to customers CBS News

But finding meat from producers isn't as easy as it once was.

"Like today, I ordered 12 boxes of whole beef tenderloins, I got six," said Andrew Neva, a third generation packer. "Because they don't have the supply."

So he pays more to get what he needs, on average 10 to 15 percent more. And some of that has to be passed along to his customers, who then pass it along to theirs, and on and on until the steak hits your table. And that is something to chew on.

  • Dean Reynolds
    Dean Reynolds

    Dean Reynolds is a CBS News National Correspondent based in Chicago.