Price of Beef Reaches U.S. Record High - NBC Right Now/KNDO/KNDU Tri-Cities, Yakima, WA |

Price of Beef Reaches U.S. Record High

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BOZEMAN - You might notice less bang for your buck when it comes to burgers this summer.

The price of beef has reached an all time high in the U.S. setting a new record of almost $4.00 a pound on average for ground beef in May.

New statistics from the Bureau of Labor released Tuesday show the average price of ground beef climbed 16% in 12 months, landing at $3.85 in the month of May.

The U.S. Dept. of Agriculture expects beef and veal prices to rise 5.5% to 6.5% in the next year.

Montana Stockgrowers Assoc. Vice President Errol Rice, says the problem is multi-faceted.

"I think the biggest factor is that we've seen nearly seven years of decline in our domestic heard in the United States and it's slid into its lowest level since 1951 and our domestic herd is sitting at about 87.7 million today," Rice said.

Rice says ranchers around the country are shrinking their herds due to high feed costs driven up by prolonged drought.

While drought is persistent in the southern United States, particularly Nevada, California and Texas, Montana crop growers say the forecast is wet for local farms, which will help our herds and hay exports to other states.

"That will probably impact us here in the Valley for the guys that are growing hay with good hay prices, because there's going to be hay needed as far away as California," said Manhattan Farmer Matt Flikkema.

Prolonged drought and smaller herds pushed the USDA to trim its beef output expectations for 2014 by 0.6% to 24.5 billions pounds.

With no end in sight for drought in southern cattle and hay producing states,  both Rice and Flikkema predict good business for Montana stock and crop growers.

"Montana has been quite well blessed with a lot of abundant rain," Flikkema said.

"The Great Falls-Havre line east is in very good shape moisture wise. It looks like they're going to hit another home run in eastern Montana good moisture maybe too much moisture, but another record crop looks like it's coming."

Due to herd loss and drought, the USDA expects the US to become a net beef importer in 2015, bringing in meat mostly from Canada.

But American beef exports have good news in the market too.

USDA Secretary Tom Vilsack announced Tuesday that the US and Hong Kong have agreed on new terms and conditions that will expand U.S. beef exports to Hong Kong.

Vilsack says Hong Kong is already the 4th largest market for U.S. beef and beef products and now all trade restrictions have been lifted.

Hong Kong was one of many countries to ban U.S. beef and beef product imports in the early 2000's due to Mad Cow disease.

In 2005, Hong Kong partly re-opened it's market to U.S. beef with restrictions.

Experts deemed U.S. beef safe years ago and earlier this year Mexico, Uruguay, Ecuador and Sri Lanka lifted their restrictions as well.