Beef prices could hit record highs in 2024, experts warn: Here’s why

(NEXSTAR) — It may not be surprising to hear about rising costs at grocery stores in recent years (remember when egg prices skyrocketed during the pandemic?).

Now, experts are warning that another food commodity, beef, could reach record prices.

Latest consumer price index report Beef and veal prices are up 7.7% compared to January 2023, according to the Bureau of Labor Statistics. Specifically, ground beef is up 5.5%, beef roast is up 6.7%, and beef steak is up 10.7%.

This comes a week after the American Farm Federation (AFBF) warned that beef prices could soon reach record highs.

So what’s behind the price hike? As we saw earlier with egg prices, supply is the main culprit.

There were 87.2 million cows and calves in the U.S. at the beginning of the year, according to AFBF economist Bernt Nelson. explain. While that sounds like enough numbers to support U.S. beef demand, Nelson said it is the lowest annual starting stock since 1951, when USDA estimates totaled 82.08 million head. Point out that there is.

The last time the U.S. experienced such a decline was in 2014, when cattle inventories fell to 88.24 million head, according to AFBF.

Unlike in the case of eggs, recent supply constraints are not due to disease in cattle.

Instead, Agriculture Department experts point to drought conditions and the rising cost of supplies to maintain herds. Both have led to farmers reducing herd sizes, Nelson explains.

“The latest cattle numbers are a stark reminder of the challenges facing America’s farmers and ranchers,” said AFBF President Zippy Duvall. press release last week. “Bad weather, high inflation and geopolitical uncertainty are hitting farmers across the country hard, and the effects will be reflected in their grocery bills.”

The last time cattle numbers declined was in 2014, when beef prices reached record highs, according to data analyzed by CNBC. show. Prices fell over the next few years, rising again in 2020, but falling later that year. Beef prices have continued to rise since the beginning of 2021.

As for why beef prices are currently relatively low in stores, Nelson points to the high level of beef production.Higher prices may not slow consumers down much, according to Kansas State University Meat demand monitor. The survey of more than 2,000 respondents found an increased willingness to pay higher prices for beef products at grocery stores from November to December 2023. wells fargo He also said retailers have noticed that consumers are “more willing to purchase steaks when the package price is less than $10 per pound.”

However, Meat Demand Monitor reports that more respondents (31% more than in November) rank price among the main aspects they consider when purchasing protein.

It is worth noting that beef prices have fallen slightly since December, down about 0.3%, according to the latest CPI. data Wholesale prices for various cuts of beef were down slightly through the first week of February, but remain higher than prices for the same period in 2023, according to the National Cattlemen’s Beef Association.

At the moment, AFBF says there is “enough cattle in the supply chain for processing,” which could help prevent the current price spike. Authorities have warned that this situation could change in late 2024 and into 2025.

Prices may rise this year, but you may find more beef deals in stores. Anne-Marie Roerinck, principal at 210 Analytics, recently said: food research institute He said he expects retailers to continue promoting and discounting beef products through early 2024.

“Even if supplies were reduced and prices increased, beef would still be the second most consumed animal protein at approximately 58 pounds per person, according to USDA estimates. per person per year,” Courtney Schmidt, Wells Fargo Agriculture and Food Research Institute sector manager, also told the magazine.