Chicago consumers – like people across the country — are wrestling with the worst inflation in decades, as they pay more for everything from gas to groceries. In fact, food prices have seen some of the most severe upswings, according to an analysis by the U.S. Department of Agriculture.
But one product has seen a sharp increase: beef. Average prices for beef at grocery stores are near record levels. In March of 2022, prices were 20% higher than they were in 2021.
WGN News looked the causes of rising meat prices from different points in the supply chain.
In Maple Park, a rural village 60 miles west of Chicago, cattle farmer Mike Martz, 67, said the last few years have been the most challenging time in his 42 years as a farmer, because of labor shortages, supply chain issues, and increased “input costs,” the price he pays for fuel, and grain for his cattle.
“It really has raised our costs from the fertilizer to the fuel,” Martz said. “I can’t think of one thing that hasn’t gone up. Supply issues. Can’t get the fertilizer here. Seed’s going up. Inflation. It’s just inflation.”
Martz feeds cows from the time they weigh about 700 pounds until they’re about 1,300 pounds, and he can send them to the meatpackers for harvesting.
The meatpacking companies are basically just four major conglomerates: Tyson Foods, Cargill, the National Beef Packing Company, and JBS Forty years ago, they controlled about a third of the market, now they dominate 85% of the industry. .
There are a lot of factors that contribute to meat prices, but in this concentrated market, there’s not a lot of competition working to drive prices down.
According to figures released this month by Tyson Foods, the average price of beef products is up 23.8% since this time last year, which is in line with recent reports of anywhere between 16%-to-21% shown on the consumer price index.
Dimitri Dernis is the head of the meat department at Urban Market, an independent grocery store in Chicago’s River West neighborhood
“Last year a pound of ground beef cost about $4.99,” he said. “Now it’s $6.99. Consumers react by buying less.”
On the corner of Franklin and Illinois Streets in River North, sits the legendary Chicago Steakhouse, Gene & Georgetti, a restaurant frequented by President Obama, Harry Caray and Frank Sinatra, among may other celebrities.
Managing partner Michelle Durpetti said the restaurant has seen economic ups-and-downs in its 81-year history.
“Like everybody else, we sort of just grip and wait and see what’s going to happen,” she said.
Her menu illustrates the inflation, as she spoke with WGN’s Mike Lowe.
LOWE: What’s the most popular steak on your menu?
DURPETTI: “Our most popular cut right now is the 8-ounce filet, we see that every week, that’s just right out the door.”
LOWE: “And how much did that cost, this time last year?”
DURPETTI: “About $46.”
LOWE: “And how much are you changing for it now?”
DURPETTI: “About $54.”
THE BURGER JOINT
Inflation’s leads to an “increase in price” and a “decrease in purchasing power” – essentially making a consumer’s dollar worth less.
At The Pub in Maple Park, owner Gus Pagonis is dealing with a labor shortage and increasing prices for all of his materials and ingredients. But – because the burger is his bread-and-butter – he’s reluctant to pass his increases onto his customs.
“It’s expensive, everything’s gone through the roof,” Pagonis said. “The (rubber) gloves that we use for every single order, they’ve tripled in price. The fry oil has quadrupled in price, and beef prices are going up every single day.”