The cost of beef in the U.S. is soaring, with prices at record highs around $8 per pound, driven by a shrinking cattle supply and rising input costs. This trend is expected to persist for several years, according to industry experts.
The reduced cattle supply is a result of a severe drought affecting major cattle ranching states like Texas and Kansas.
This drought has significantly reduced the size of cattle herds, now at their smallest in decades. Consequently, beef production is forecasted to drop by 180 million pounds in the latter half of the year.
Ranchers are holding onto cattle longer to rebuild herds, which limits beef availability and increases costs. These added costs are passed on to consumers.
Drought and high costs lead to record beef prices, affecting all cuts.Additionally, heightened input costs for labor, transportation, and feed further contribute to the price hike. The drought has also led to a reduction in hay stocks, essential for feeding cattle, reaching their lowest level since 1954.
As a result, beef cow slaughter has increased, with 2022 seeing the highest numbers since 1996. This reduction in cattle numbers, combined with high production costs, means that beef prices will remain high for the foreseeable future.
While prices for higher-end cuts like steaks are expected to rise significantly, ground beef products such as burger patties might see more moderate increases due to their use of less expensive cuts.
Consumers should brace for higher prices on beef products, with a significant impact on steak and other premium cuts, as the industry grapples with ongoing supply and cost challenges.