Supply constraints and high demand have pushed up beef prices. Experts warn that it could take years to keep prices down.
This is why beef prices are at record highs
The average retail price of 1 pound of ground beef in May was $5.98, 16% higher than a year ago and 34% higher than 2020.
Straight Arrow News
Labor Day BBQ this year isn’t cheap.
According to the Labor Bureau, supply constraints and high demand have led to increased beef costs, with 100% ground beef prices in June exceeding $6 per pound for the first time since data collection began in the 1980s.
Costs could drop slightly once the grill season is over, but experts say a significant price cut could be several years away.
“We’re excited to introduce you to our customers,” said David Anderson, professor of livestock and food marketing and extended economist at Texas A&M. “But I think there’s some opportunity for relief from this (summer) price surge.”
Why are beef prices getting higher?
A variety of factors have crushed the country’s cattle supply over the years. This includes recent drought conditions that have increased the cost of cattle feed and encouraged ranchers to send more cattle to the massacre. National beef herds are at their lowest since 1961, according to a January report from the US Department of Agriculture.
In May, the USDA also halted imports of live cattle from Mexico due to the spread of new world screwworms, further limiting increases in US supply and fuel prices. According to the USDA, parasitic larvae of fly can cause “severe and often fatal” damage to animals.
Despite rising prices, there is still a lot of demand for beef. The USDA estimates that consumption this year will increase slightly from 2024.
The US has increasingly changed to imports to meet its demand for trimming lean beef, especially in ground beef. According to the Iowa Farm Bureau, about 20 to 30% of ground beef comes from countries such as Australia and Brazil.
The threat of tariffs from the Trump administration can raise prices even further. For example, Brazil has faced 50% tariffs since August 1st. Currently, Brazilian beef is subject to customs duties between 10% and 36.4%, depending on the size of the import.
“It adds a lot of uncertainty to the market,” Anderson said of the looming tariffs.
When will be the price of beef fall?
Lower demand tends to spur lower prices. This means that shoppers may find a slightly modest relief when the weather cools.
“The prices of beef usually tend to fall,” Anderson said. “Seasonally, I think we’re likely to see lower prices than where we were in the last few weeks.”
Still, Anderson said it’s unlikely that prices will return to shoppers in the $3 to $5 range that they’ve paid in recent years.
Part of this is because it takes time for ranchers to build their flocks. For example, if ranchers decide to maintain calves born this spring, they will have to wait years for them to be big enough to send to the market, Anderson said.
“It will take us in 2029 to increase beef production,” he said. “It’s just biology and time.”
The timing also depends on the ongoing demand for beef, according to Michael Swanson, chief agricultural economist at Wells Fargo Agrifood Institute. When beef prices get higher, ranchers are giving money to build herds. If demand is reduced and cattle prices drop, the recovery may take time.
Already cattle farmers and ranchers are facing “spark profit margins on razors,” according to a May report from Byrne Nelson, an economist with the United States Farm Bureau Federation.
“It’s a very tense supply chain for now. With record amounts on the table, what they’re doing is,” Swanson said.
How to save money with beef
What’s Swanson’s advice for shoppers looking to save money? It is open in various cuts of meat.
According to June figures for the labor sector:
- All uncooked ground beef is $6.34 per pound, an 11% increase from a year ago
- Chuck roast increased by $8.20 per pound, up 7.2%
- Round roasts increase by $7.76 per pound, up 12.8%
- Sirloin steak costs increased by 12.92 per pound, up 12.7%
- Stew beef increased by $8.02 per pound, up 10.7%
“Everyone likes to buy filet mignon, but there are a lot of cuts that can give you value for money,” Swanson said. “If you’re willing to cook slowly, some people don’t want it to have a delicious flavour.”
