What is the Price of Beef and Why Does it Keep Going Up?

If you’ve been to the grocery store lately, you may have noticed that the price of beef seems extraordinarily high. Steaks, roasts, and even ground beef are all more expensive than ever before. So what is driving these prices up, and will beef become affordable again anytime soon? Let’s take a closer look.

Current Beef Prices Are at Record Highs

Beef prices have been setting new record highs over the past couple of years. According to the U.S. Bureau of Labor Statistics, the average price for a pound of ground beef reached $5.80 in April 2022. Sirloin steak averaged $12.33 per pound. These are the highest prices tracked for these cuts of beef since data collection began in the 1980s.

Other cuts of beef are also seeing unprecedented prices. Brisket, ribeye steak, roasts, and other popular cuts are more expensive than consumers have ever seen before. Overall, beef prices were 8.5% higher in April 2022 compared to the previous year.

Why Are Beef Prices So High Right Now?

Several factors are driving the exceptionally high beef prices over the past couple of years:

• Reduced Cattle Supplies: The U.S. cattle inventory is the smallest it’s been in decades, which means less beef is available. Drought, high feed costs, and consolidation in the cattle industry caused many farmers to reduce herd sizes.

• Strong Consumer Demand: Despite high prices, consumers have maintained a healthy appetite for beef. The demand remains quite strong.

• High Production Costs It’s very expensive for cattle farmers to maintain and expand herds now due to inflation, high interest rates, and drought impacting grazing. This limits supply response

• Supply Chain Issues COVID-19 labor shortages and other factors have disrupted meat processing and transportation. This puts upward pressure on beef prices.

• Russia’s Invasion of Ukraine: This impacted global agricultural trade flows, indirectly leading to higher beef prices.

When Will Beef Prices Start to Go Back Down?

Unfortunately, there are no signs beef prices will drop significantly anytime soon. Here are some of the key reasons why prices are expected to remain elevated:

• Beef production is constrained by the multi-year process of building up cattle herds. It takes 18-24 months just to raise a calf to slaughter weight.

• Input costs for cattle farmers remain high limiting their ability to rapidly expand.

• Strong exports and domestic demand provide little incentive for consumers to cut back on beef purchases.

• New tariffs on imported beef put additional pressure on beef prices in the U.S. market.

The market likely needs a scenario where beef demand drops or cattle supplies surge to lead to broadly lower prices. But neither situation appears imminent. The next couple of years will likely see beef stay historically expensive for consumers.

How Much Does Beef Cost at the Grocery Store?

Current grocery store beef prices clearly vary by exact cut, quality grade, store promotions, and geographical region. But on average, recent prices for common beef purchases are:

• Ground beef: $4.50 – $6.50 per pound
• Sirloin steak: $9.00 – $14.00 per pound
• Ribeye steak: $13.00 – $17.00 per pound
• Roast: $7.00 – $11.00 per pound
• Brisket: $7.00 – $12.00 per pound

While nominal beef prices are at record levels, adjusting older pricing for inflation shows today’s prices are on par with peaks reached in the 1970s. Either way, consumers are dealing with exceptionally high beef costs at the grocery store.

Monitoring Live Cattle and Beef Price Trends

To keep an eye on market conditions underlying beef prices, there are a few helpful resources:

• The National Beef Wire provides free real-time data on cattle sales at auctions across the country. This can identify price trends for live cattle.

• The Chicago Mercantile Exchange offers futures prices for live cattle and lean hogs. This shows market expectations for future cattle prices.

• The Trading Economics website includes a chart of historical Brazilian beef prices, which gives perspective on longer term price cycles.

• The U.S. Department of Agriculture publishes regular livestock and meat price reports. These have wholesale beef price information.

Checking these resources periodically can help consumers understand if we are reaching peaks or valleys for cattle and beef pricing. However, in the near term prices will likely remain elevated.

How Can Consumers Cope with High Beef Prices?

With beef prices expected to remain high, consumers may need to employ some coping strategies:

• Substitute less expensive proteins at times, such as chicken, pork, eggs, beans, or tofu.

• Search for marked down beef approaching its sell-by date. Just be sure to cook or freeze it right away.

• Buy larger cuts of beef and portion the meat yourself. This avoids the higher cost of pre-portioned beef.

• Try cheaper beef cuts like chuck roast, brisket, or stew meat. These benefit from slow moist cooking methods.

• Purchase a side or quarter of a cow with a group to lower costs. Make sure you have freezer space.

• Occasionally treat beef as a splurge item rather than an everyday protein.

While these tips can help limit the strain on your budget, a return to affordable beef prices unfortunately may not occur for a couple more years due to the supply-demand imbalance. Consumers will need to remain flexible and patient as the beef market goes through this cycle. But prices will eventually stabilize when expanded production caps price spikes.

Average Retail Food and Energy Prices, U.S. and Midwest Region

Meat Cuts and Price List – Summer 2024