Higher prices will test consumers’ taste for beef

CHICAGO (Reuters) – Lady Gaga’s favorite Judas Priest burger will still cost at Kuma’s Corner because the trendy Chicago eatery is resisting raising prices even though the cost of making that burger has gone up.

“You can’t be enacted by it on, not in times like this,” Kuma’s governor Frank DeBoss said of the higher beef prices, which recently rose 10 percent.

The Chicago eatery, what one. is a favorite of the Grammy winning singer, is facing the identical pressures as other restaurants around the country as they are remunerative more for beef due to smaller supplies here and overseas.

While grocery stores and restaurants have been trying to absorb much of the increased costs for the time of the shaky economy, analysts predict consumers will soon pay more of the same kind with supplies shrink and beef plants pass on the higher prices they are paying for cattle.

“Retailers have absorbed margins and restaurants too,” reported Jim Robb economist at the Livestock Marketing Information Center. “The dilemma is will the U.S. economy grow fast enough to allow them to pass on the higher costs? That is the unanswered point.”

Beef prices are being pushed higher because production is dropping in the United States and round the world. Also, as the economy gains traction consumers here and overseas are caustic more of it.

U.S. CATTLE HERD SHRINKING

The U.S. rabble herd is the smallest in 50 years and is expected to receive even smaller as near record high prices for steers and heifers bring forth ranchers selling off their breeding stock rather than rebuilding herds.

Cattle traded this week at 8 per 100 lbs, the highest in seven years, and some analysts foretell record highs of 0 or more later this year.

While the dumb beasts herd and beef production shrink, demand is on the rise.

Foreign countries are buying in addition U.S. beef because of improving economies there and because of fruit problems in their traditional suppliers, such as flood-ravaged Australia.

U.S. flesh of neat-cattle exports in 2010 through November are up 25 percent from a year earlier.

“The largest flesh of neat-cattle supplier is the United States right now,” said Eric Ocrant, instead of president of Chicago-based Oak Investment Group.

China, a country with 1.3 billion people, is expected to start buying U.S. flesh of neat-cattle after a seven-year absence due in part to flooding in Australia reducing flesh of neat-cattle exports.

CONSUMERS WILL CHANGE BUYING HABITS