By Shelby Shank
Field Editor

Retail beef prices are reaching record highs in the U.S., driven by the shrinking U.S. cattle inventory and continued strong consumer demand.

According to the Consumer Price Index released by the U.S. Bureau of Labor Statistics (BLS), the average price of ground beef rose to $6.12 per pound in June, up nearly 12% from a year ago. Steak prices also surged, with the average price of uncooked beef steaks reaching $11.49 per pound, up 8% from the previous year.

This marks the first time since the BLS has been tracking retail beef prices in the 1980s that ground beef prices have topped $6 per pound.

The rise in prices is largely due to a tighter supply of cattle.

The U.S. cattle herd is at its lowest level in over 70 years, which has led to a reduction in the U.S. beef supply.

“The expansion of the beef cattle herd continues to be slow, and demand continues to be very strong,” Randy Blach, CEO of CattleFax told the Texas Farm Bureau (TFB) Radio Network.

Much of the strain on supply comes from a combination of drought conditions and high input costs pushing ranchers to send more cattle to harvest rather than retaining them to rebuild herds.

The U.S. cattle supply tightened even further in May when the U.S. Department of Agriculture suspended live cattle imports from Mexico due to the spread of the New World screwworm.

To help meet growing domestic demand, the U.S. has increasingly turned to imports of lean beef trimmings used in ground beef. Imported lean trimmings are mixed with fatty trimmings from domestic processing to keep the supply chain moving and meet consumer demand.

“The top suppliers of beef going into the U.S. in the first five months of the year were Brazil, Australia and Canada, and from each of those countries we brought in just over $1 billion a piece to bring the total from all suppliers to the U.S. to over $6 billion,” Erin Borror, U.S. Meat Export Federation chief economist told the TFB Radio Network. “I see this as an incredible marker of the demand for beef in this country.”

Blach said that overall per capita of beef consumption remains steady, and the average American consumes 50 to 60 pounds of beef annually.

He expects consumers to continue seeing increased retail beef prices even after the summer grilling season ends.