In the United States this year, following the decrease in prices of two major consumer goods — gasoline and eggs, the price of another important food staple, beef, continues to rise, showing signs of ongoing upward momentum.
Mr. Geng, who runs a restaurant in Los Angeles County, has noticed a recent increase in beef prices. The price per pound has risen compared to a month ago, nearly $1 higher than last year. The beef consumption at his Chinese restaurant is not large, only adding up to an extra $300 or less per month. However, for fast-food chains like McDonald’s that rely heavily on beef as a primary ingredient, the increase could lead to significant cost escalation.
The United States is the world’s largest consumer of beef. Whether it’s barbecue or hamburgers, beef has become an indispensable part of Americans’ daily diet. According to economic data from the Federal Reserve, in July, the price of ground beef was $6.25 per pound, an increase of $0.71 since January. By September, the price of steak had soared to $11.88 per pound, nearly an additional dollar since the beginning of the year.
At the Sam’s Club in Los Angeles, where members can enjoy discount prices, the price of boxed ground beef has seen multiple increases this year. In mid-February, it was $4.58 per pound, which rose to $5.18 by mid-April, then unexpectedly dropped to $4.98 per pound in May and June, before rising again to $5.36 per pound by late August.
A report from the USDA in late August revealed that the retail prices for beef and veal in the U.S. have been rising for seven consecutive months as of June and July this year. In July, prices were 2.5% higher than in June and showed an 11.3% increase compared to the same month last year.
An analysis from the USDA’s “Livestock, Dairy, and Poultry Outlook” report attributes the price increase to a decrease in the U.S. cattle population since 2019, leading to a tight supply while consumer demand remains robust. Americans consume an average of 225 pounds of meat per year, with beef accounting for nearly 30%, equating to an average monthly per capita spending on beef of $35.47 at home.
According to the Associated Press, as of early this year, the U.S. cattle inventory had dropped to 86.7 million head, the smallest since 1951. There is an estimated continued downward trend in cattle inventory before any improvement. The shrinking cattle population is believed to be linked to a three-year drought in U.S. cattle-producing regions that started in 2020. The drought led to increased feed costs, forcing ranchers to sell or slaughter more cows to meet the demand for beef, subsequently reducing the cattle population.
International trade conditions may also be a contributing factor. Currently, the U.S. is facing a trade deficit in beef. Imports of beef to the U.S. reached 46.4 billion pounds last year and may increase to 52.7 billion pounds this year. It is estimated that the beef trade deficit could reach 1.8 billion pounds by the end of the year. However, at the beginning of 2025, a screw worm infestation in Mexico, which accounts for 20% of U.S. beef imports, prompted the U.S. government to halt beef imports from Mexico.
The current volume of beef imports to the U.S. has increased by 28% compared to the same period last year. Import tariffs are also expected to have some influence on the rising beef prices. The majority of U.S. beef imports come from Canada, and as of August 1st, the U.S. imposed tariffs ranging from 25% to 36% on Canadian beef.
Moreover, the increase in beef prices may also be influenced by seasonal factors. The traditional peak consumption periods for beef in the U.S. occur in the weeks surrounding Memorial Day, Independence Day, and Labor Day, during which beef consumption is at its highest.
Due to the longer growth cycle of cattle, even if ranchers start purchasing more heifers for breeding, it may not have a significant impact until early 2027. It takes two years for heifers to reach market weight, thus it is estimated that a substantial increase in domestic beef supply in the U.S. may not be seen until the end of 2027 or early 2028.
Experts suggest that budget-conscious consumers can opt for beef cuts or ground beef, or more affordable options like chicken as substitutes.
Additionally, the U.S. is increasing beef imports from countries such as Australia and Brazil, which helps alleviate the pressure of rising beef prices. Approximately 30% of Australia’s global beef exports are sent to the U.S. This year, the U.S. is expected to set a record for beef imports from Australia. ◇