Beef prices soar amid drought, herd reductions

Anyone firing up the grill this summer already knows hamburger patties and steaks are expensive, but the latest numbers show prices have climbed to record highs.

And experts say consumers shouldn’t expect much relief soon either.

The average price of a pound of ground beef rose to $6.12 in June, up nearly 12% from a year ago, according to U.S. government data. The average price of all uncooked beef steaks rose 8% to $11.49 per pound.

If prices remain this high, shoppers will likely start to buy more hamburger meat and fewer steaks, but that doesn’t appear to be happening broadly yet — and people also don’t seem to be buying chicken or pork instead of beef.

This is not a recent phenomenon. Beef prices have been steadily rising over the past 20 years because the supply of cattle remains tight while beef remains popular.

In fact, the U.S. cattle herd has been steadily shrinking for decades. As of Jan. 1, the U.S. had 86.7 million cattle and calves, the lowest number of cattle since 1951, according to the U.S. Department of Agriculture.

The American beef industry has gotten better at breeding larger animals, so ranchers can provide the same amount of beef with fewer cattle, said David Anderson, a livestock economist at Texas A&M.

Then in 2020, a three-year drought began that dried out pastures and raised the cost of feed for cattle, according to the American Farm Bureau. Drought has continued to be a problem across the West since then, and the price of feed has put more pressure on ranchers who already operate on slim profit margins.

In response, many farmers slaughtered more female cattle than usual, which helped beef supplies in the short term but lowered the size of future herds. Lower cattle supplies has raised prices.

In recent years cattle prices have soared, so that now animals are selling for thousands of dollars apiece. Recent prices show cattle selling for more than $230 per hundredweight, or hundred pounds.

Those higher prices give ranchers more incentive to sell cows now to capture profits instead of hanging onto them for breeding given that prices in the years ahead may decrease, Anderson said.

The emergence of a flesh-eating pest in cattle herds in Mexico has put extra pressure on supply because officials cut off all imports of cattle from south of the border last year. Some 4% of the cattle the U.S. feeds to slaughter for beef comes from Mexico.

Even if ranchers decided to raise more cattle to help replace those imports, it would take at least two years to breed and raise them. It wouldn’t be clear if that is happening until later this fall when ranchers typically make those decisions.

There is typically a seasonal decline in beef prices as grilling season slows down into the fall, but those price declines are likely to be modest.


(AP Photo Sue Ogrocki)