Beef prices are on the rise mostly because of simple economics, according to Texas A&M Agrilife (Amarillo) Economist Dr. Justin Benavidez. "Demands for beef quantities are high certainly with what we consume in this country. But - demand is also high in other countries for the beef we produce here.!" He says our recent weather is also coming into play. "Texas being in a drought over the last year...at this point -- we are losing some inventory in calves raised Texas that we send to markets in the middle of the country."
Demand for beef is going up in the U.S. and abroad - but Dr. Benavidez says our supply is being challenged. "Demand is increasing but at the same time supply is not increasing at the same rate. We can expect prices to go even higher. So - that's where we're seeing prices to stay high at least for another year or two."
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He points out that although their costs of raising cattle are getting higher, ranchers are in a highly competitive market and can't raise their own prices. Our drought and rising feed costs have caused many herds to thin, but Americans are hungrier for beef than they have been in a very long time and so far are paying the elevated prices.
Dr. Benavidez says ranchers can't control their pricing, but grocery stores can!
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High demand for beef. Low supply of cows. Higher prices.