Tuesday, July 22, 2014

Burgers are more expensive than ever — blame China

Valters Krontels/Flickr

As you head out to grill this weekend, you may get the feeling that your burgers aren't as cheap as they used to be. This is no illusion. After a long mid-aughts stagnation of nominal ground beef prices, prices of soared for the past several years:

Beef

The main explanation appears to be dramatically rising Chinese beef imports, which have soared since 2010:

Screen_shot_2014-04-14_at_10.07.00_am
One interesting wrinkle is that American beef is actually banned in China, ostensibly for public health reasons. But the global beef market is pretty efficient, so Chinese beef demand pushes up American prices anyway.

The good news for American consumers is that Chinese economic growth is slowing, so the future impact of this trend shouldn't be so dramatic. The bad news is that there's very little sign the direction of the trend will change. As Asian countries get richer, American farmer owners will benefit and American meat-eaters will lose.

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