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Anyone who burned the grill this summer already knows that burger pate and steaks are expensive, but the latest numbers show prices have risen to high prices.
And experts say consumers shouldn’t expect much relief anytime soon.
According to US government data, the average price of ground beef rose to $6.12 in June, up nearly 12% from a year ago. The average price for all uncooked beef steaks rose 8% per pound to $11.49.
However, this is not a recent phenomenon. Beef prices have steadily risen over the past 20 years. Because the supply of beef remains tight and beef remains popular.
In fact, American herds have been steadily shrinking for decades. As of January 1, the US Department of Agriculture said as of January 1, 86.7 million cows and calves had fallen by 8% in the United States, down 8% from its latest peak in 2019.
Many factors, including drought and cattle prices, have contributed to the decline. And now, the emergence of nasty parasites in Mexico and the widespread tariff outlook could further reduce supply and price hikes.
Let’s take a look at why beef prices are rising.
Smaller flocks
According to David Anderson, a livestock economist at Texas A&M, the American beef industry is breeding better with larger animals, allowing ranchers to provide the same amount of beef.
Then, in 2020, according to the U.S. Farm Bureau, three years of drought depleted dry pastures and began to raise the cost of cattle feed. Since then, drought has been a problem in the West, with feed prices putting more pressure on ranchers who are already operating at a small profit margin.
In response, many farmers slaughtered more female cows than usual, helping to supply beef in the short term, but reduced the size of their future herds. The supply of low cows has increased prices.
With cattle prices rising sharply in recent years, animals are now sold for thousands of dollars each. At recent prices, cows are sold for over $230 per 100 weight or 100 pounds.
These higher prices give ranchers more incentives to sell cows rather than hanging on them for breeding, given the potential for prices to decline over the next few years.
“For them, balance is like, ‘Sell that animal now and do this record high check?’ or ‘Would you keep her to make sure she’s back to her productive life when she’s keeping her calves?” Anderson said. “And this balanced act, so far the winner is selling her and getting a check.”
The dilemma of illness
The emergence of carnivorous pests on Mexican herds has put special pressure on supply as it blocked all cattle from the south of the border last year. Approximately 4% of the cows that the US feeds to massacre beef comes from Mexico.
Pests are New World Screwworm Flies, and female fly lay eggs wounded by warmed animals. Hatched larvae are rare among flies to eat live meat and liquids instead of dead ingredients. American officials worry that if a fly reaches Texas, its carnivorous maggots could cause significant economic losses, as they did decades ago before the US eradicated pests.
Agricultural economist Bert Nelson said the losses on many of the cows are putting additional pressure on supply that will help raise prices.
Tax issues
President Donald Trump’s tariffs have yet to have a major impact on beef prices, but with the US importing more than £4 million in beef each year, it could be another factor that will boost prices.
Imported is lean beef trimming, where meatpackers mix with fatty beef produced in the US to produce the kind of ground beef that domestic consumers want. Much of that lean beef comes from Australia and New Zealand, which only saw a 10% tariff, but some of it comes from Brazil, where Trump threatened a 50% tariff.
If tariffs are enforced for the long term, meat processors will have to pay a higher price with imported lean beef. The country’s system is directed towards the production of fatty beef, known for marble steaks, so it’s not easy for US producers to replace it.
The price probably remains high
Kansas agricultural economist Glyn Tonsor said it will help raise prices, Kansas agricultural economist Glyn Tonsor said it was the US grill season and high demand for beef.
If the prices are this high, shoppers may start buying more burger meat and steaks and fewer steaks, but that doesn’t seem to happen widely yet.
Nelson said the drought has recently eased and the conditions of pasture could improve, and grain prices have been falling thanks to lower corn export demand due to tariffs. These factors, combined with the higher cattle prices, could convince more ranchers to keep cattle and breed to increase the size of the herd.
Even if ranchers decide to raise more cattle to replace these imports, it will take at least two years to breed and raise them. And it’s not clear if that’s going on until later this fall, when ranchers usually make those decisions.
“We still have many barriers to growing this herd,” Nelson said. Consider that young farmers who want to add 25 reared heifers to their herds must be ready to spend more than $100,000 on auctions when borrowing costs remain high.
Usually, there are seasonal declines in beef prices as the grill season is slower in autumn, but these prices can be modest.
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Associated Press writer Dee-Ann Durbin contributed to this report from Detroit.
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