USA – Retail beef prices reached an unprecedented high in July, with the USDA’s Economic Research Service (ERS) reporting that the national average price for all fresh beef hit US$8.15 per pound.
This milestone marks the first time the cost of fresh beef has surpassed US$8, raising concerns among consumers nationwide who are questioning the factors behind the soaring prices.
The surge in beef prices is the result of several years of compounding challenges, including persistent drought conditions, inflationary pressures, and a shrinking cattle inventory.
The downturn in pasture conditions began in 2020 due to a La Niña-driven drought, which persisted for three years and significantly deteriorated pastures across the United States.
This prolonged drought, combined with rising inflation, led to record-high feed grain prices, exacerbating the financial strain on farmers and ranchers.
As costs soared, many farmers were forced to send a higher percentage of female cattle to slaughter rather than keeping them for breeding.
This decision temporarily boosted beef production but has ultimately resulted in a significant contraction of the U.S. cattle inventory.
The current cattle inventory is now the smallest it has been in 73 years, severely reducing the nation’s beef supply.
Rebuilding the cattle inventory is a slow process compared to other livestock, as it takes between 18 to 24 months for a calf to reach market weight.
Additionally, in cow-calf operations, where farmers breed cattle and sell the calves, holding back a female calf for breeding rather than slaughter adds at least another year before that cow produces a calf that contributes to the inventory.
This reduction in cattle numbers is expected to exert further upward pressure on beef prices. While retail beef prices are already at record highs, the situation could worsen as ranchers have not yet begun holding back females for breeding.
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