Cool, wet weather, a later Easter and a rise in corn and beef prices have some meat retailers worried about their profits at a time when they usually are increasing revenue.
The April rains in Arkansas did more than push rivers out of their banks - they delayed the traditional start of the grilling season, when grocery stores and butcher shops see a surge in the sale of midgrade beef and pork cuts destined for backyard barbecues across the country.
Grilling season is loosely defined as beginning on the first warm, sunny weekend in late March or early April.
The Hearth, Patio & Barbecue Association, an industry group based in Arlington, Va., said on its website that 82 percent of North American households own a grill or a smoker. Gas-grill owners use their grills an average of 45 times a year while charcoal grill owners use them 27 times a year.
The most popular times to grill are the traditional summer holidays, with the Fourth of July, Memorial Day, Labor Day and Father’s Day as the top four, the association said.
Missy Ditto, who with husband, Steve, owns Carson’s Meat Market in Walnut Ridge, said the weather plays an important role in how the business fares throughout the year.
“When it is warm, sunny and nice we see a surge on steaks or anything that can go on the grill. Business is slower through the winter, so we look forward to the grilling season,” Missy Ditto said.
Executives with Springdale-based meat giant Tyson Foods Inc. mentioned the cooler weather as a contributing factor to the company’s flat second-quarter earnings released on Monday May 9.
Gary Mickelson, spokesman for Tyson Foods, said it is difficult to specifically quantify the significance of the grilling season to the company’s business.
“We can tell you this time of the year is synonymous with increased demand for certain products. In the beef business, rib eye, sirloin and t-bone steaks are among the most popular grilling season cuts,” he said in an emailed statement Friday May 13.
Industry data from the National Cattlemen’s Beef Association shows there was a 60 percent increase in the volume of boneless beef rib eye steaks sold in April, May and June of 2010 over what was sold inJanuary, February and March of that year, Mickelson stated.
David Lee, owner of Ivan’s Old Time Meat Shop in Rogers, said early April is typically the start of grilling season in Northwest Arkansas but this year has not been typical.
“This whole year has been weather nuts. It has been one thing after another,” Lee said.
April showers kept temperatures low and skies cloudy through to May, putting off the season.
Plus, a later Easter meant the observance of Lent, a 40-day period of penance - including dietary restrictions for meat - overlapped the start of grilling season.
April’s rainfall measurements more than doubled the normal averages in some areas of the state, especially Northwest Arkansas, according to the National Weather Service in North Little Rock.
Official rainfall for Fayetteville in April measured 15.28 inches, up 252.89 percent from the average April rainfall of 4.33 inches.
The rainy weather has significantly affected his business, Lee said, but so has the high price of fuel.
“Groceries - anything that comes in on a truck - everything is at least 20 percent more than last year,” Lee said.
Brian “Wally” Wallis, caterer and customer service manager and self-described “meat market commando” at Hoggs Catering and Meat Market in Little Rock, said the weather is not dampening sales of grilling cuts at the shop all that much.
“I’ve noticed that not much keeps Arkies from grilling, not even snow,” Wallis said.
The recorded April rainfall in Little Rock was 7.23 inches, up 32.18 percent from the average April rainfall of 5.47 inches.
Wallis said beef prices are higher than he remembers seeing in a long time.
The U.S. Department of Agriculture’s Market News reported that the low wholesale price for beef in October was $1.55 per pound. The price had climbed to $1.86 per pound in January and was $1.97 per pound as of April 8.
On Wednesday, the beef carcass choice price was $1.67 per pound, USDA Market News reported.
“At the first of the year, live sales of beef on the hoof almost doubled in price. It is really eating into the shop margins,” Wallis said.
Corn prices have been feeding into increased beef, pork and chicken prices. Most of the livestock feed in the United States is a combination of corn and soybeans with other nutritional additives.
The U.S. corn crop - valued at $66.7 billion in 2010 - is in higher demand in this country and around the world, driving up its market price and costs for companies that use corn as animal feed.
The price of corn hit an all-time high earlier in April at $7.8375 a bushel, well over the previous high of $7.65 in June 2008.
Ethanol is also making demands on the U.S. corn crop. The Environmental Protection Agency increased the amount of ethanol blended into gasoline supplies from 10 percent to 15 percent.
Beef prices are pushing more customers to switch to less-expensive meats, such as pork, Wallis said.
“But we have not noticed a drop-off in beef all that much,” he added.
While some people may avoid driving to restaurants because of higher gas prices, Wallis said, they are still buying meats to cook at home.
A Hearth, Patio & Barbecue Association poll, the results of which were released in late April, found that 70 percent of Americans prefer cookingout over eating out to save money.
Corn prices dropped last week, however, after the USDA said the country’s inventory will be bigger than analysts expected.
Stockpiles might rise to 900 million bushels, well above previous estimates of a 15-year low of 730 million bushels.
After the report was released Wednesday, corn futures for July delivery dropped to $6.77 a bushel, the lowest price since March 31.
Business, Pages 71 on 05/15/2011