Beef lovers across America have noticed empty meat cases and higher prices at grocery stores over the past year leading many to ask – why is there a beef shortage in 2021? Unfortunately, the reasons behind dwindling beef supplies and rising costs are complex. In this article we’ll take an in-depth look at the key factors that have contributed to the ongoing beef crisis.
Causes of the 2021 Beef Shortage
The current shortage has been driven by a perfect storm of events impacting beef production and availability
Extreme Weather Events
Cattle ranchers in major beef producing states like Texas have been culling herds due to extreme drought conditions reducing pasture lands. Texas provides 14% of U.S. beef cows, so ongoing droughts here lead to fewer calves and cows entering the supply chain. These climate events directly limit beef production.
Processing Capacity
COVID-19 outbreaks and worker absenteeism have slowed production at meat processing plants across the country. With less processing capacity, less beef is able to make it to market to meet demand. Labor shortages continue to plague processors, constraining supply.
Supply Chain Disruptions
Transportation delays, packaging shortages and other ongoing disruptions make it harder to get beef from farms to processing facilities and from there to consumers. This further tightens available inventories.
Surging Demand
Grocery sales surged during the pandemic, outpacing already strong pre-COVID demand. This intensified competition for limited supplies of beef as both consumers and restaurants competed for product.
Increased Input Costs
Droughts and rising corn prices have made cattle feed much more expensive for ranchers and feedlots, forcing more liquidation of herds. Additionally, costs for fuel, packaging materials, and other inputs have risen.
The Impact on Consumers
For consumers, the beef shortage has led to:
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Higher prices, with choice steak cuts up over 20% from 2020.
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Less selection, as stores have fewer beef options and often lack certain cuts due to limited processing.
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Shrinking package sizes, as retailers ration out limited supplies to more customers with smaller packages.
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Potential substitution, with some consumers switching to more available proteins like chicken or pork as beef gets pricier.
When Will Beef Supplies Rebound?
Most industry experts don’t expect beef availability and pricing to fully stabilize until late 2023 or even 2024. It will take that long for herd rebuilding, increased processing capacity, and easing supply chain issues to significantly improve inventories.
Several factors point to the prolonged nature of the shortage:
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It takes time to rebuild cattle herds, keeping supplies low for years after liquidation events.
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Labor shortages may continue to impact processing plants as the economy recovers.
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Global events like the pandemic and war in Ukraine could cause further supply chain disruptions.
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If droughts persist, input costs will remain high and further herd liquidation is likely.
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Surging consumer demand is expected to keep pressure on limited beef.
How Consumers Can Cope in the Meantime
Until beef availability rebounds, consumers can take steps to mitigate the impacts:
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Purchase beef in bulk directly from local ranches when possible to find better pricing.
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Choose cheaper beef cuts like chuck roast or bottom round over pricier steaks.
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Substitute alternate proteins like chicken, pork or fish more often.
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Reduce beef portions or decrease frequency of beef meals.
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Seek out deals on ground beef and use it in more meals.
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Consider plant-based beef alternatives to offset high costs.
While the beef shortage and high prices are frustrating outcomes, they reflect temporary imbalances between supply and demand. With smart shopping strategies, consumers can still enjoy delicious beef as part of a thrifty meal plan.
The Bigger Picture – Challenges Facing the Beef Industry
Looking beyond the current shortage, there are broader challenges impacting the future of beef production:
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Consolidation of the beef industry has reduced competition and transparency. The lack of data on cattle prices and facility operations fuels concerns.
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Drought and climate change present ongoing hurdles to maintain cattle herds and keep costs low.
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Consumer interest in plant-based meat alternatives is rising, though total sales remain small.
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Health and environmental concerns around beef may reduce demand longer-term.
To address these issues, the beef industry will need to focus on resilience, transparency and innovation in the years ahead. Despite recent shortages, beef remains a staple food for American consumers. With smart strategies and leadership, the beef industry can overcome current and future challenges.
Beef Supply Chain Constraints
Despite increasing beef prices, the demand for beef has remained strong as consumers claim they will continue to purchase beef. Unfortunately for beef manufacturers supply is declining and is expected to be 56 pounds per capita in 2024, 1.9% lower than 2023.2 This is due to the contraction of beef heards, ongoing drought, higher producer input costs, supply chain issues, and more. Which means beef manufacturers will be faced with narrowing margins in 2024.
In the face of historically high cattle prices, margins are going to suffer. The biggest question for manufacturers is when the domestic herd is going to recover from years of liquidation. Previously, opinions were split down the middle. Some outlooks were saying the herd would be replenished by 2025, and others were saying short supply and high cattle prices will continue well into 2025.3,4 However, new predictions show we can expect to see continued struggles in 2025 and beyond. According to RaboResearch, analysts predict that per capita beef supplies in 2025 will be 58.8 pounds, a dip from an estimated 59.6 pounds in 2024.5
As beef supply tightens, consumer shopping decisions will determine the outcome of cattle prices. If consumers continue to buy beef at higher prices, then cattle and calf prices will continue to rise. However, if consumers stop purchasing as much beef, cattle prices may see more resistance. These concerns will continue to trouble the beef cattle industry if supply does not start to bounce back.
Fortunately, consumers in the United States are willing to pay around $9/lb for steak, which is within current pricing, however, prices are expected to reach record highs in the upcoming months–approaching nearly $10/lb. This will likely result in a consumer shift to less expensive cuts rather than a complete avoidance of beef, but will still have an impact.6
Is there a beef shortage right now?
If you’re in the habit of getting your groceries in-store, you might have noticed a few of your favorite items being out of stock intermittently or for more than a few weeks at a time.
Whether it’s a chain restaurant no longer advertising what was once your favorite steak entree or the grocery store prompting a change-up in routine dinners generally prepared at home, if you’ve experienced this lack of beef, you’re not alone.
First, it’s important to note that the U.S. Department of Agriculture denies any national meat and animal product shortages. They’ve assured constituents of their continued watch on how commercially available these things remain to the public.
However, this is not to say that the shortages people are seeing all around them aren’t valid. A growing number of people are encountering various shortages which affect them in ways that are close to home, and that’s real!
Is there a beef shortage?
FAQ
Why is there a beef stock shortage?
Agricultural economists blame it on an ongoing drought, along with high feed costs and inflation.Feb 15, 2024
Why is there a ground beef shortage in 2025?
In short, reduced beef production and continued strength in demand are expected to be the major factors underlying U.S. beef markets in 2025. ¹ Prices across the beef complex are expected to average into new highs as many seasonal supply and demand factors also remain at play.
What is the problem with the beef supply?
Climate Impact on Beef Supply
One of the main reasons for the decline in cattle herds is the diminishing quality of pastureland across the Midwest due to the ongoing drought. Beef cattle herds have been declining since 1975 and have reached a 61-year low, according to the U.S. Department of Agriculture.
Is there a beef shortage in the US?
In a nutshell, the US, Australia, and other major countries around the world are currently suffering from a beefshortage. This is because of a cyberattack on the world’s largest meat producer, JBS. This prompted the Brazil-based company to shut down its processing plants in Australia and North America.
What happened to the beef industry in 2021?
At a stroke, the U.S. lost the ability to process 30,000 head of cattle per week. In May 2021, a cyberattack temporarily closed all of the U.S. processing operations of JBS, the largest meatpacker in the world. That attack disrupted one-fourth of the U.S. beef supply.
What happened to beef prices in 2023?
The industry saw record prices for beef at the end of 2023. The fresh beef supply hit $7.94 per pound and although those retail prices were high there was still a lot of demand. She said that retail prices in the coming year will be up 4.6 percent while pork retail prices will be down 1.3 percent and poultry will be down 2 percent.
How much has beef cattle decreased in 2022?
The inventory of all U.S. beef cattle decreased two percent from a year ago and that decline follows a four percent decrease in the U.S. beef herd from 2022 to 2023. Contrasting with those numbers is the fact that the number of cattle on feed – being fed for the market – has increased two percent from year-ago levels.
Will beef exports go down again in 2024?
Boetel said U.S. beef production is going to be down again in 2024, so we will continue to see beef exports continue to decline in the coming year. That becomes a bigger concern if the larger U.S. beef buyers end up sourcing their beef from another country and we lose their markets. “That’s an expectation given where our supply is for beef.”
Why did beef prices go up?
Though the brief acknowledges supply and demand issues as factors that have caused prices to go up, it also blames the four major conglomerates that control 82% of the nation’s beef production — compared to 25% in 1977 — saying that the lack of competition has resulted in not only sky-high prices, but also record profits for them.