Retail Beef Prices Continue UPWARD Trend

Many of my friends have started to question me about why beef prices, ground beef in particular, have rose so much in the recent months. My first response was what do you mean because as a producer we a butcher all of our meat so even though I had heard prices were going up in stores I hadn't realized just how much it was going up.

According to University of Missouri, in February retail beef prices increased by 23 cents to an average of $5.58 per pound. This was the largest jump in over ten years which caused beef prices to increase 34% in that month alone. With that being said, I can understand why consumers are beginning to ask questions about beef prices and slowing down on buying beef.

Beef Price Chart

As a producer, the most simplest way to tell people why prices are going up is there is a supply and demand issue going on within the cattle market where there is high demand and low supply. Unlike other commodity markets such as corn or beans, cattle cannot bounce back as fast from a bad year it takes several years to recover. What consumers are experiencing is the effects of the drought in 2012 where producers were forced to cull or cut back on the size of their herd(depleting supplies for this year) for many different reasons with the main one being input costs. Some producers couldn't afford to keep the cattle around so they sold what they had and went a different way with their operation which continued to shrink the size of the cow herd which is now the smallest it's been since the 1950's.

Many producers are now in the rebuilding stage of their herd and are doing so by keeping back replacement heifers which is keeping even more cattle out of the market. The combination of all this has caused the price of cattle being sold  to increase drastically and in return has caused it to go up for consumers. Overall, I believe we will see retail beef prices continue to increase for consumers over the next several months until we can rebuild the cattle herd back up to where supply and demand are more balanced which could take several years.