Just going for groceries is not as cheap as it was a year ago, and for the average consumer, might even cause one to plan for more budgeting. One of the main drivers for these price increases is not just a result of high inflation of the US Dollar that you read streaming across the TV screen every morning as you eat your Wheaties. Bruce Blythe is a business editor for The Cattle Network. In Blythe's article titled: "Supermarket meat, dairy inflation accelerates in August," he explains, "Supermarket dairy prices last month posted the largest increase in over three years and beef and pork inflation also accelerated as high feed costs and tight animal supplies forced consumers to pay more for steaks, chops, milk and other products" (Blythe).
There is a great effect between economic complements and substitutes in agricultural production. For example, milk cows are not just used for milk. If a milk production cow does not produce an adequate amount of milk to cover its own costs, that cow will be culled (sold for meat). Meat and dairy markets work simulaneously. If I sell a milk cow for beef because of inefficiency, the supply of milk decreases and the supply of meat increases. Legitimately inflating milk prices and deflating beef prices.
Now, let us say the Central US is flooded for two months longer than it is normally. This lowers the supply of corn, of which, is a staple for people and animals. This increases the price of corn which is an input cost for animal production, relaying that cost throughout beef and milk prices and to you the consumer.
This is great food for thought next time you sit down for a steak at Texas Roadhouse or Outback Steakhouse.