In the United States, beef prices are continuing to rise across the country, following a trend reminiscent of the previous surge in egg prices. The main reason for this situation is the reduction in the number of cattle in recent years, making the beef supply shortage even more challenging to resolve quickly than the egg shortage.
One of the last notable price surges at U.S. supermarkets was when egg prices hit a historic high. Following this, as the deadly avian flu epidemic was brought under control and producers resumed supply, egg prices began to fall.
However, now beef prices are staging a similar scenario. According to data released by the U.S. Department of Agriculture last week, overall retail beef prices have risen nearly 9% since January this year, reaching a historical high with an average retail price of $9.26 per pound. The Consumer Price Index (CPI) for June showed that prices for steaks and ground beef have increased by around 10.3% and 12.4% respectively compared to the same period last year. The average price of ground beef last month was $6.12 per pound, up from $5.47 the year before, and $5.98 in May this year.
In comparison, pork products only saw a 0.5% increase in June, while poultry products rose by 3.9%.
June of this year marked the first time since the 1980s that the price of ground beef surpassed $6 per pound.
The rise in beef prices stems from various factors, including short-term and long-term reasons, with the reduction in the U.S. cattle population being a primary cause.
Courtney Schmidt, industry manager at Wells Fargo’s Agricultural Food Research Institute, told Axios, “We are dealing with a shortage in beef supply, which is the main driving factor behind the current rise in beef prices.”
Agricultural economist Derrell Peel also stated in an interview with Newsweek, “This situation has been developing for years.”
He added that since 2020, due to drought in some regions, the U.S. cattle population has dropped to the lowest level in decades.
Drought conditions, rising grain prices, inflation, and interest rate hikes have collectively led to a significant increase in cattle raising costs in recent years, forcing farm owners to reduce the size of their herds. According to the latest statistics from the U.S. Department of Agriculture, as of January 1st, the total number of cattle and calves on U.S. farms was 86.7 million, the lowest level since 1951.
Furthermore, according to Peel, due to the uniqueness of the beef production industry, resolving supply shortages will require adjustment over several years. This makes it more challenging than dealing with an egg supply shortage.
Explaining further, he said, “When we don’t have enough inventory to maintain production, the only solution is to make the tight supply even tighter. In the cattle industry, they can only give birth to one offspring at a time. If that offspring is a female, and you want to use it for breeding to rebuild the herd, then you cannot use it for beef production in the short term.”
(Acknowledgement to Newsweek for reference in this article)