Athens, GA |
If you’ve noticed a spike in beef prices at the grocery store, you’re not imagining things. According to agricultural experts, beef prices have reached their highest levels in 70 years—and the trend isn’t reversing anytime soon.
“When we look at some of the data… beef prices overall are up fifteen percent,” says Will Secor, Extension Livestock Economist at the University of Georgia. “That compares to other proteins like pork that’s up maybe around two percent. Chicken is up around three percent year over year.”
Secor says much of the increase is due to supply issues. The U.S. cattle herd is shrinking, and the impact is felt at every step of the supply chain.
“We’ve been approaching the low in this most recent cattle cycle,” he explains. “We have lower cattle inventory that’s creating lower beef—even though we’re actually producing more beef per head.”
That tighter supply means prices are rising across the board—from calves to carcasses.
“We’re seeing high prices all along the supply chain,” Secor says. “That high retail price is translating back to high wholesale prices, high fed cattle prices, and high feeder cattle and calf prices.”
And while producers might be tempted to expand their herds to meet demand, it’s not a quick fix. Secor likens the process to turning around an ocean liner.
“Supply is really slow to turn around,” he says. “It takes a while for producers to make that retention decision and start to see those supplies actually translate into more beef at the retail level.”
In the meantime, producers will need to keep a close eye on their bottom line.
“Having a good sense of where your breakeven is, making sure that you’re an efficient producer… and that you have the infrastructure in place to take advantage of different market opportunities,” Secor advises. “Those would all be areas on the production side that also help you maintain a good margin and even potentially increase revenue without even expanding your herd.”
With no immediate relief in sight, both producers and consumers may need to adjust to a new normal in beef prices—at least for the foreseeable future.
By: John Holcomb