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The latest inflation numbers from the government show that consumer prices are rising at their fastest rate in 17 years. High gas and grain prices are hitting food producers hard, and prices are expected to rise sharply this fall and winter.
Inflation numbers released Thursday by the Labor Department show that consumer prices are up 5.6 percent compared with this time last year. That's the biggest increase in 17 years.
Meat at the supermarket has contributed to that increase, and high feed and fuel prices mean that steak will likely cost a lot more this fall.
At Robert and Gale Seddon's central Virginia farm, next fall's steak is ambling toward the gates, eyeing its dinner. These cows' feeding time is taking a bite out of Olde Towne Farm's profit. So the Seddons are paring their herd of 25 down to 10 this year.
"I've got to sell eight of them or nine of them just to cover the cost of feed," Robert Seddon says.
He says the price of feed has increased 50 percent. Hay has doubled from two years ago. Add the increase in gas and diesel, and the profit from a beef cow is half what it was.
"Somebody's making money; it ain't me, though," he says.
Commodity prices have backed off a bit in recent weeks, but global grain demand is still outstripping supply. As a result, meat prices are headed for a bigger spike.
"A lot of people are severely reducing the size of their herds, and that may cap the beef price. But once they run out of animals to cull and sell off, beef prices are going to shoot through the roof," Robert Seddon says.
Heather Vaughan, spokeswoman for the National Cattlemen's Beef Association, says there's unlikely to be a shrink in supply until the period from September to November. She says some farmers are simply shutting down.
"A few years ago, we saw about 900,000 people raising cattle," she says. "Today that number's closer to 760,000."
In fact, the U.S. Department of Agriculture recently said beef cow inventory decreased 1 percent from last year, to about 33 million cattle. Since earlier this year, the wholesale price of beef increased about 18 percent.
Just 10 miles north of the Seddons' farm, farmer John Goodwin says he's adapting to increased costs.
To save money, he plans to let his 300 cows graze longer on grass. But his herd also eats a mix of grains and plant that looks like dry cereal and smells like old beer. He says it's high in energy and protein.
But it also fluctuates in price and is expensive to ship. So two months ago, Goodwin's family farm built a huge concrete storage unit designed to store feed.
"We're looking then to buy things when they're at their cheapest and store them for as long as we need to until we can utilize it," he says. "This is a way we can help our cost of production, so we lower it."
Goodwin says he has a vested interest in running an efficient operation — and not just for the welfare of his business. After all, he's a consumer himself. His favorite foods?
"Steak and ice cream are probably the top ones," he says. "And that's not because I'm a beef producer."
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