Premium beef prices are down

After months of wallet-clutching prices, the cost of a steak can finally come down.

Pricey cuts of meat such as rib-eye and New York strip — often among the most expensive single items in a grocery cart — are even seeing discounts at some stores as meat plants strengthen staff and supply balanceThe Wall Street Journal reports.

The price of beef in the store down .7% in the four weeks ending August 7, according to a report of Information Resources Inc. cited by the WSJ. It was the fourth straight week of decline in more than a year and a half after a 1% decline in the previous period.

Part of the price drop is likely due to changes in consumer behavior.

Tyson Foods said in its third quarter results released earlier this month that the average selling price for beef decreased in the third quarter of 2022 “driven by a decrease in demand for premium cuts of beef compared to exceptionally high demand in the third quarter of fiscal 2021.”

“Promotional pricing has come back to where it was two years ago,” one shopper told the WSJ. “I always eat red meat. I’m happy.”

Prices at the wholesale level fell from June to July, the first month-on-month decline in more than two years and a sign that some of the U.S. economy inflationary pressure cold last month.

An August report from the Ministry of Labor showed that the producer price index – which measures inflation before reaching consumers – declined 0.5% in July. It was the first monthly decline since April 2020 and was down from a sharp 1% increase from May to June.

The easing wholesale inflation indicates that consumers can get some relief from the relentless inflation in the coming months. The wholesale report followed government data on Wednesday that showed that consumer inflation was unchanged from June to July – the first flat figure after 25 straight months of increase.

But economists caution that it is still too early to say that inflation is heading lower.

“The July deceleration … is a move in the right direction,” said Rubeela Farooqi, chief US economist at High Frequency Economics. “But producer costs continue to rise at a rapid rate, above target.”

Federal Reserve officials saw signs that the US economy was weakening in their last meeting but still called inflation “unacceptably high” before raising their benchmark interest rates by a sizable three-quarter point in their drive to slow spiking prices.

In a few minutes from the July 26-27 meeting they were released on Wednesday, the policymakers said they expected the economy to expand in the second half of 2022. But many of them suggested that growth will weaken as high rates take hold. Officials said the housing market, consumer spending, business investment and factory production have slowed after expanding strongly in 2021.

Slower growth, they noted, could “set the stage” for inflation to gradually fall to the central bank’s annual goal of 2%, although it remains “well above” that target. But policymakers have made it clear that for now, they want to continue raising rates enough to slow the economy.

The Associated Press contributed to this report.

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