MELISSA BLOCK, host:
At the risk of telling you something you already know all too well, the cost of just about everything is going up. The Labor Department released new inflation numbers today. Consumer prices are up 5.6 percent compared with this time last year. That's the biggest increase in 17 years.
ROBERT SIEGEL, host:
If you've been to the meat counter at the supermarket lately, you've no doubt felt that increase, and if you think it's bad now, just wait a few months. As NPR's Yuki Noguchi reports, high feed and fuel prices mean that that steak you're eyeing will likely cost a lot more this fall.
YUKI NOGUCHI: Right now, next fall's steak is ambling towards the gate, eyeing its dinner at Robert and Gail Seddon's farm.
(Soundbite of cow)
NOGUCHI: These cows' feeding time is taking a bite out of Olde Towne Farm's profit. So the central Virginia farmers are paring their herd of 25 down to 10 this year.
Mr. ROBERT SEDDON (Farmer): I've got to sell eight of them or nine of them just to cover the cost of feed.
NOGUCHI: Robert Seddon 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.
Mr. SEDDON: Somebody's making money; it ain't me though.
NOGUCHI: Commodity prices have backed off a bit in recent weeks, but global grain demand is still outstripping supply, and as a result, meat prices in general are headed for a bigger spike.
Mr. SEDDON: 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.
Ms. HEATHER VAUGHAN (National Cattlemen's Beef Association): We're not going to really see until September, October, November the supply start to shrink a little bit.
NOGUCHI: Heather Vaughan is a spokeswoman for the National Cattlemen's Beef Association. She says some are simply shutting down.
Ms. VAUGHAN: A few years ago, we were seeing about 900,000 people across the country raising cattle, and today that number is closer to 760,000.
NOGUCHI: In fact, the USDA recently said beef cow inventory decreased one percent from last year to about 33 million cattle. Since earlier this year, the wholesale price of beef has increased about 18 percent.
Just 10 miles north of the Seddon's farm, farmer John Goodwin says he's adapting to increased costs. To save money, Goodwin plans to let his 300 cows graze longer on grass, but his herd also eats a mix of grains and plants that looks like dry cereal and smells like old beer.
Mr. JOHN GOODWIN (Farmer): And it's high in energy, and it's also high on protein.
NOGUCHI: 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.
Mr. GOODWIN: We're looking to be able to buy products when they're at their cheapest and then store them for however long we need to until we can fully utilize them. This is a way that we can help improve our cost of production so we lower it.
NOGUCHI: 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?
Mr. GOODWIN: Steak and ice cream are probably the top ones, and that's not because I'm a beef producer.
NOGUCHI: Yuki Noguchi, NPR News.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.