Beef prices could hit record highs in 2024, experts warn: Here’s why

(NEXSTAR) — After the last few years, it may not be surprising to hear about rising costs at the grocery store (remember when egg prices skyrocketed during the pandemic?).

Now, experts are warning another grocery item could reach record prices: beef. 

The latest Consumer Price Index report from the Bureau of Labor Statistics shows beef and veal prices are up 7.7% compared to January 2023. More specifically, ground beef is up 5.5%, beef roasts 6.7%, and beef steaks are up 10.7%. 

This comes a week after the American Farm Bureau Federation (AFBF) warned we could soon see record-high beef prices. 

So what’s behind the price jump? Like we previously saw with egg prices, supply is largely to blame. 

At the start of the year, there were 87.2 million cattle and calves in the U.S., AFBF economist Bernt Nelson explains. While that sounds like plenty to support U.S. beef demands, Nelson notes that’s the lowest inventory to start a year since 1951, when estimates from the U.S. Department of Agriculture put the overall count at 82.08 million. 

The last time the U.S. experienced such a dip was in 2014 when, according to AFBF, cattle inventory fell to 88.24 million. 

Unlike what happened with eggs, the latest limited supply isn’t being caused by illness among cattle. 

Instead, experts from the Farm Bureau point to drought conditions and the rising costs of supplies to maintain herds. Both have led to farmers reducing their herd sizes, Nelson explains.

“The latest cattle numbers are a stark reminder of the challenges facing America’s farmers and ranchers,” said AFBF President Zippy Duvall in a press release last week. “Severe weather, high inflation and geopolitical uncertainty are taking a toll on farmers across the country, and families will see the effects in their grocery bills.”

When we last saw cattle counts dip in 2014, beef prices hit a record high in 2014, data analyzed by CNBC shows. Prices dropped in the years after, jumping again in 2020, only to fall later that year. Since early 2021, beef prices have continued to climb. 

As for why beef prices are relatively low at the stores now, Nelson points to a high level of beef production. Higher prices may not slow consumers much though, according to Kansas State University’s Meat Demand Monitor. A survey of more than 2,000 respondents found an increased willingness to pay higher prices on beef products at the grocery store between November and December 2023. A recent report from Wells Fargo also noted that retailers have noticed consumers are “more enthusiastic about buying steak when the package price is under $10 per pound.”

However, more respondents (31% more than in November) rank price among the leading aspects they take into consideration when it comes to purchasing protein, the Meat Demand Monitor reports. 

It’s worth noting that beef prices have dipped marginally since December, coming down about 0.3%, according to the latest CPI. Data from the National Cattlemen’s Beef Association shows wholesale prices across various cuts of beef have come down slightly through the first weeks of February, but are higher than prices we saw during the same period of 2023.

As for now, the AFBF says there is “enough cattle in the supply chain for processing,” which can help keep prices from increasing aggressively now. That could change in the latter half of 2024 and into 2025, the agency warns. 

While prices could increase this year, you may find more deals on beef at the store. Anne-Marie Roerink, principal at 210 Analytics, recently told The Food Institute that she expects retailers to turn to promotions and discounts on beef products through early 2024.

“Even with lower supplies and higher pricing, beef will be the second-highest consumed animal protein at almost 58 lbs. per person annually, according to USDA estimates,” Courtney Schmidt, Wells Fargo Agri-Food Institute sector manager also told the outlet.