US beef prices have reached record highs due to supply shortages caused by drought and disease pressure. Despite the high prices, farmers and businesses are not making more profit due to high costs. Rancher Eric Gropper, who sells calves for record sums, is not better off because his costs have equally climbed. Feedlot companies are also not making bigger profits as they have to buy cattle at all-time highs. Meatpackers are losing money due to the limit on what they can charge for beef.
US Beef Prices Soar to Record Highs
UKPulse Money DeskUS beef prices have reached record highs due to supply shortages, but farmers and businesses are not making more profit.
- US beef prices are 12% higher than a year ago
- Supply shortages are caused by drought and disease pressure
- Farmers and businesses are not making more profit due to high costs
Why this matters: The situation will not change until significantly more US cattle come to market, which will take at least three years.
What this means for you: If you're a consumer, you may see higher prices for beef in supermarkets and restaurants, but businesses may not be able to pass on the costs due to competition and efficiency losses.