Beef in a local Giant Food Store. (Credit: Tom Sofield/LevittownNow.com)
While consumers are seeing prices remain steady at around $3.15 per gallon at the pump and relief in the egg aisle, a trip to the grocery store is delivering sticker shock for beef.
According to federal and industry data, beef prices are climbing to historic highs due to supply chain pressures, drought, and high demand.
A recent report from business news outlet Marketplace attributed the increases to a spike in grain prices and a widespread drought that caused ranchers to reduce their herds a few years ago.
Naomi Blohm with Total Farm Marketing told Marketplace there are now six million fewer cattle in the country compared to 2020, even as demand remains strong.
Federal tariffs on imported foreign goods and beef have also contributed to the price increases, according to finance news organization Money Digest.
Tariffs are fees a country imposes on imported goods and services. They often increase the price of imported products and generate government revenue. Many economists view tariffs as a tax on American consumers.
“We’ve kind of hit this perfect storm,” Brady Blackett, a Utah-based Angus cattle producer, said to NPR. “There’s healthy competition for the cattle, and there’s not enough of them to fulfill the demand. And so it has driven prices to historic highs.”
The high cattle prices, coupled with high input costs, incentivized many ranchers to reduce their breeding herds by culling older cows and selling heifers that otherwise would have been kept for breeding, according to Virginia Tech agribusiness expert Mario Ortez Amador.
The factor resulted in fewer calves entering the production pipeline.
“Because it takes about 18-24 months for a calf to reach slaughter weight, production is relatively unresponsive to price signals in the short run,” Ortez Amador said. “Even though beef prices are high, it takes time for producers to rebuild the herd and bring more beef into the market.”
Bureau of Labor Statistics data indicates that the prices for ground beef and steak have increased by more than 20 percent since January.
The price hikes, according to the NPR story, lead to price hikes at restaurants and grocery stores.
The rising costs have drawn political attention from consumers and politicians.
President Donald Trump has called for beef producers to lower prices and has accused meat packers of manipulating the cost of beef.
U.S. Attorney General Pam Bondi announced on social media that federal authorities are investigating meatpacking firms.
Trump has also sought to import beef from Argentina, a move has angered the domestic cattle industry and prompted pushback from some Republican lawmakers.
Ortez Amador predicted recently that beef prices will only lower once the national herd begins to rebuild.
“That process starts when producers stop liquidating cows and begin retaining more heifers for breeding. But those heifers won’t calve for two years, and the resulting calf will take another 18 months to reach market weight,” Ortez Amador said. “That means it could be several years before supplies increase enough to meaningfully pressure prices downward.”
