Meat prices keep rising as herds shrink, cost to feed cows increases

The price of beef is up, the result of Americans’ urge to consume hamburgers, steaks and hot dogs, among other food items, and a reduction in U.S. supply. And prices could keep rising.

The U.S. Department of Agriculture reported earlier this month that cattle prices have become higher because of firm demand, despite the country importing 1.2 billion pounds of beef from international sources.

The USDA report predicted beef exports are expected to be down 8.3% year over year due to tightening cattle supplies in the United States and “tougher global competition” from such beef exporting countries as Australia.

Dana Ehrlich, the founder of Verde Farms in Woburn, Mass., a provider of USDA certified organic, 100% grass-fed and 100% free-range beef, said U.S. beef prices have risen because of a smaller U.S. cattle supply, largely driven by drought over the past couple of years.

“As supply has reduced and demand has remained strong, prices have risen at the wholesale and retail level. Import levels have risen to backfill the lack of U.S. beef supply, which helps to moderate the price inflation,” he said.

Ehrlich, who also serves as the vice chair of the Meat Importers Council of America and a board member of the Meat Institute, said U.S. consumers have a “strong affinity for beef, which continues to maintain very strong demand despite the higher prices.”

Gabriel LLaurado, a restaurant owner in Florida told UPI that higher prices result from supply-and-demand economics.

LLaurado, the co-founder of online butcher Meat N’ Bone, based in Miami, and runs a catering service and a casual steakhouse, The Wagyu Bar, which specializes in certified Wagyu beef products.

Wagyu is a Japanese beef cattle brand, which is said to be pinker and more delicate and resistant to drying out if cooked for long periods.

“We’re looking at a dip in beef production this year, down by 6.5% from 2023,” Llaurado said. “This means we’ll have the lowest beef availability in the U.S. since way back in 1970. Ranchers, like the cow-calf producers, aren’t expanding their herds despite higher cattle prices.”

LLaurado said rising costs to run a ranch, high interest rates and drought conditions haven’t helped shrinking cattle availability, either.

“And let’s not forget about feed prices staying sky-high since 2022 and a significant drop in hay production,” he said.

Customers looking for choice beef — an item LLaurado calls the “heartbeat of U.S. beef prices” — could be the most affected because of prices in supermarkets, where the more wallet-friendly beef is getting pricier.

“We steer clear of broadline sources and instead team up with smaller farmers in high-quality programs,” he said. “This move means inflation hasn’t hit us as hard.

“The twist in the tale? We’re now more competitively priced than some local grocery spots, even with our top-notch quality. It’s a curious twist, no doubt, but it’s turning out to be a sweet deal for our business.”

Omaha Steaks President and CEO Nate Rempe told UPI that the company has seen business jump 52% since 2019, and although he’s seen headlines reporting a “crisis,” that’s the not the case.

While the next couples of years might be tough in the cattle cycle, he said, there “signs of life to provide a light at the end of the tunnel.”

Rempe said while domestic beef production is expected to decrease about 3% compared to 2023 — the lowest level since 2017 — the country will still produce 26 billion pounds of beef in 2024.

“Rising meat prices are often most noticeable at your local grocery store and restaurants, which typically have quicker reactions to supply chain price increases they pass on to their customers.”

Distributors more dependent on imported meats can often see prices rise due to transit costs.

“The big question is, what will it cost the consumer to buy that beef? Due to factors like higher labor and other input costs, we expect beef prices across the industry will rise higher in 2024 and 2025 than we’ve seen the last few years,” he said.