US shortage makes price of beef sizzle

Photo / Thinkstock

The summer barbecue is set to get more expensive as beef prices hit new highs, due mostly due to a supply shortage in the United States.

ASB Bank's Beef Index has set a new record in each of the last five weeks. By the end of last week, the index was 5 per cent higher than the previous peak in September 2008, and with no sign of abating.

"The main dynamic in play is the remarkably tight US beef market, with the US beef herd at record lows," ASB said.

The US Department of Agriculture has said it may not be until 2017 before US beef production expands again after the 2010-12 drought decimated herd numbers.

Andrew Murray, who owns The Milford Butcher on Auckland's North Shore, said prices generally firmed around this time of year because of seasonal supply constraints, just as people dusted off their barbecues.

"There have been increases of $2 to $3 a kilo across the whole steak department over the four weeks. With my supplier, I have not been able to get everything that I wanted because they just haven't had it."

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