Beef prices are at an all-time high

If you have walked into a grocery store in recent months, you have likely noticed the high price of beef. With beef prices at an all-time high, it is more and more difficult to continue to purchase on a regular basis. But what has caused these prices to go up?

To start off with, consumer demand for beef continues to be extremely high. Beef is heavily enjoyed and utilized by the American public which has caused demand to remain strong despite increases in prices.

Beef inputs have continued to increase for the American rancher. Just as prices across the board have increased in each of our daily lives, the same is true for the products that go into producing cattle. From feed and hay price increases, additional costs for fertilizer, to the consistently expensive fuel prices, it costs more to produce cattle today than it did a few years ago. As such, beef producers must receive a higher price in order to break even.

Repeated droughts have led to a decrease in the size of the U.S. cow herd. During the droughts of the past few years, producers have been unable to maintain their cattle economically. This has led them to sell more of their cattle than they have been accustomed to. High prices for hay and fuel have prevented the rebound in numbers that would have been expected. This will likely lead to even fewer cow numbers by next year. The smaller cow herd has resulted in a decrease in beef production of 5% with that number projected to increase through 2025.

Shrinking cattle supplies, coupled with steady strong demand is a recipe for increased costs. Add to that the increase in input costs, and it results in the record prices that we are seeing in the meat aisle.