Where’s the beef? This is the reason why Americans are getting less meat while paying more
Beef prices are up across the United States and it’s going to be very difficult for the government to bring costs down.
Consumers in the United States have had to put up with a lot in recent years, with price rises becoming a regular feature of life since the outbreak of the pandemic in 2020.
In recent years the price of eggs has been a real topic of controversy in US politics and a sign of the economic crunch that many Americans have felt. Now, experts are warning that the price of beef might become even more of a problem.
Data from the Department of Agriculture suggests that the price of beef has risen by around 9% since January, taking the average price to $9.26 per pound. In particular, the price of steak has risen by 12.4% in the past 12 months.
“Beef is way more complicated than eggs,” explained Wells Fargo’s chief agriculture economist Michael Swanson. “The cattle industry is still the ‘Wild West’ of the protein market, whereas the egg market is more ‘Corporate America’ with its supply and demand management.”
Recently Tyson Foods, one of the largest meat production firms in the country, announced another round of lay-offs. The company CEO Donnie King said on an earnings call that “beef is experiencing the most challenging market conditions we’ve ever seen.”
So why are prices so high at the moment? It isn’t due to massive profiteering on the part of the producers, who are widely acknowledged to have had to cut their margins to keep consumers on-board. According to the American Farm Bureau Federation (AFBF), ranchers are now forced to spend huge amounts of money on animal feed as the amount of suitable grazing land shrinks.
Increased frequency of drought across large areas of ranchland in the US means that farmers can no longer free-graze their animals on grass. Instead, they are being forced to spend money on expensive cattle feed, bumping up the price for consumers and taking a large chunk out of their potential profits.
In a market intel report released back in May, AFBF economist Bernt Nelson explained: “Even with these record high prices, margins for cattle farmers and ranchers are razor thin thanks to continued elevated supply costs.”
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