Beef prices have surged 9% since the beginning of the year, hitting a new record high due to heightened demand and dwindling supplies, according to the U.S. Department of Agriculture (USDA).
In June, meat prices well outpaced the entire food-at-home category, with steak and ground beef prices rising 12.4% and 10.3%, respectively, compared with a year earlier, according to the Labor Department’s consumer price index (CPI).
Beef prices are now hitting a record $9.26 per pound at retailers as of June, according to the USDA.
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“If this feels familiar, it’s because we saw a similar spike with eggs earlier this year. But unlike eggs, beef is a whole different beast,” Michael Swanson, chief agriculture economist for the Wells Fargo Agri-Food Institute, said, adding that “the egg industry’s centralized structure allowed for quicker price corrections. Beef, on the other hand, is fragmented and complex, making recovery slower and more unpredictable.”
The issue is that demand for beef continues to outpace supply. At the same time, producers are still dealing with higher input costs for feed, labor and energy.
“While tight supplies have been a major factor driving up cattle and beef prices, demand is the other part of the equation,” Bernt Nelson, an economist with the American Farm Bureau Federation, said in a May report. “With the supply side largely fixed, U.S. demand for beef is the linchpin holding together razor-thin profit margins for our nation’s cattle farmers and ranchers.”
He noted that if demand weakens, cattle prices will likely decline, but it would result in “a major obstacle to any meaningful expansion of the U.S. cattle herd.”
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Industry Leaders Sound the Alarm
Tyson Foods CEO Donnie King told analysts in May that “beef is experiencing the most challenging market conditions we have ever seen.”
Brady Stewart, Tyson’s chief supply chain officer, told analysts the company saw an “extreme drop,” almost 18%, in the number of cows being sent to slaughter. The company also noticed fewer young female cows being raised for meat as farmers are keeping them to grow their herds again. The number of heifers is down about 4% compared with last year, the company reported in May.
Omaha Steaks CEO Nate Rempe echoed similar concerns last month, telling FOX Business’ Maria Bartiromo on “Mornings with Maria” that the number of head of cattle in the country is at a low not seen since the 1950s.
“The supply pressure is really putting a lot of upward pressure on price, especially as demand is still so strong in the U.S.,” he said.
Major retailers have also been keeping an eye on beef prices, which has impacted their guidance for the 2025 fiscal year.
Walmart CFO John David Rainey told FOX Business earlier this year that food is “slightly inflationary,” which is really due to a few items like eggs, bacon, some other meats.”
Meanwhile, Wendy’s CEO Kirk Tanner also told analysts that beef prices are driving inflation.
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