Experts say cost of beef is rising, high prices to persist for a while

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Fear & Greed Index

Why Is Beef So Expensive Right Now?

Why Is Beef So Expensive Right Now?

Why Is Beef So Expensive Right Now?

Why Is Beef So Expensive Right Now?

Why Is Beef So Expensive Right Now?

Why Is Beef So Expensive Right Now?

Why Is Beef So Expensive Right Now?

Why Is Beef So Expensive Right Now?

Why Is Beef So Expensive Right Now?

Why Is Beef So Expensive Right Now?

Why Is Beef So Expensive Right Now?

Why Is Beef So Expensive Right Now?

Why Is Beef So Expensive Right Now?

Why Is Beef So Expensive Right Now?

Why Is Beef So Expensive Right Now?

Why Is Beef So Expensive Right Now?

Why Is Beef So Expensive Right Now?

Pricey beef cuts may sell less as a result of the economy’s slowing down, but don’t start looking for deals just yet.

Burger and steak prices are likely to remain stable and high due to market forces that have been building for a while, including devastating droughts.

In part, that’s because there’s less beef. Beef supply shortages “have been coming for a while,” according to David Anderson, a professor at Texas A&M The effects that we had anticipated for a few years are now beginning to materialize. ”.

Extreme drought struck the United States in recent years, forcing farmers to sell cattle quickly because it was either too expensive or impossible to maintain their herds in such dry conditions. This year’s supply issues are a result of the wave of sales, particularly of breeding cows.

Why Is Beef So Expensive Right Now?

“Tightening cattle supplies are expected to cause a significant year-over-year decrease in beef production, the first decline since 2015,” a March market outlook from the US Department of Agriculture noted.

Anderson stated, “If we produce less beef, the pressure is on for higher prices.” The “big unknown is going to be consumer demand. ”.

According to Lance Zimmerman, senior beef analyst with Rabobank, the supply of beef tends to increase and decrease in roughly 10-year cycles. When supply shrinks, consumer prices tend to go up. But this year is more difficult due to people’s concerns about the economy.

The question of whether there is a recession risk that needs to be factored into the market for the following year is the one that occupies the majority of market analysts’ thoughts at the moment, according to Zimmerman. “If that’s the case, beef prices may be steadier. ”.

Additionally, due to persistently high food inflation, consumers are already reducing their purchases of some goods, including beef.

In the three months ending December 31, 2022, Tyson (TSN), which processes about a fifth of the nation’s beef, poultry, and pork, saw a decline in beef sales.

Why Is Beef So Expensive Right Now?

Beef sales “were down 5. 6% compared to record high sales in the prior year,%E2%80%9D said CFO John Tyson during a February analyst call discussing the quarterly results, noting that prices were down in the quarter due to %E2%80%9Csofter domestic demand for beef The business stated that it anticipates lower beef margins this year as a result of the decreased domestic supply.

According to Adam Speck, senior livestock analyst at Gro Intelligence, “Retailers continued to push price on the consumer throughout last year.” As they make their plans for the year, they must now determine whether there will be sufficient demand to justify raising prices even further.

“The answer is probably no,” said Speck. That may not be a huge relief, as beef prices are still relatively high. In 2022, fresh choice beef retailed for $7.59 per pound, according to March data from the USDA. That’s up from $7.25 per pound the previous year.

Stores may try to test the waters during barbecue season.

Bernt Nelson, an economist with the American Farm Bureau Federation, stated that the spring season is when “we’re at the bottom of our traditional seasonal demand.” He noted that demand for beef typically declines following the holidays and increases when people light up their grills in the summer. In the fall and later, Bernt said, “we may see some higher beef prices” if demand remains high. Ad Feedback.

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Why are Beef Prices Skyrocketing?

FAQ

What is causing beef prices to rise?

The culprit is a rapidly shrinking supply of cattle. Ranchers have been forced to sell off livestock as a result of years of persistent drought, which makes raising cattle more expensive, pandemic disruptions, and widespread cost increases, bringing the number of cattle in the U S. to its lowest level in nearly a decade.

Why is US beef so expensive right now?

Extreme drought struck the United States in recent years, forcing farmers to sell cattle quickly because it was either too expensive or impossible to maintain their herds in such dry conditions. This year’s supply issues are a result of the wave of sales, particularly of breeding cows.

Will beef prices ever come down?

According to Tyson Foods, the decrease in the average sales price of beef in the third quarter of 2022 was “driven by reduced demand for premium cuts of beef as compared to exceptionally high demand in the third quarter of fiscal 2021,” which was announced earlier this month. ”.

Why is beef so expensive 2023?

Since the beginning of December, winter weather has brought some much-needed moisture to much of the United S. remains under threat of drought conditions for 2023. The winter weather has made it difficult for packers to secure cattle, which led to a decrease in cattle slaughter last week and an increase in beef prices.

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