In early January, I shared with you my concern about rising beef prices. Well, during the last several weeks, other observers have begun to express the same concern. Iâ??ve seen countless articles echoing what I shared with you. Itâ??s no wonder, since the U.S. Department of Agriculture reported the average retail price per pound for fresh beef in January was $5.04, the highest price ever on records that date back to 1987.
Time magazine ran the story â??Beef: Itâ??s Whatâ??s No Longer Affordable for Dinnerâ? earlier this month, in which it pointed out that at the start of 2014, U.S. ranchers had 87.99 million head of cattle, the lowest total since 1951. The cause? Long periods of drought in California and Texas. The same piece went on to point out, just as I indicated to you in January, that rising beef prices will be hitting both you and restaurants during the next few years.
That situation tells me that before too long, weâ??ll either be seeing a round of price increases at companies like McDonaldâ??s (MCD), Ruthâ??s Hospitality (RUTH), Red Robin Gourmet Burgers (RRGB), Del Friscoâ??s (DFRG) and others, or their profits and earnings will be hit. Of course, higher prices are likely to hit the revenue line. Either way, itâ??s not a good time for beef-heavy restaurant companies.
Read more about how rising beef prices will impact the economy and your wallet at Eagle Daily Investor.