December CPI Report Reveals 16.4% Annual Surge in Beef Prices
Omaha Steaks President and CEO Nate Rempe weighs in on surging beef prices ahead of the holidays, arguing that the U.S. needs to rebuild the herd.
Beef prices are on the rise, with American households facing increased costs for steaks, roasts, and burgers, as highlighted by the latest inflation data. The Bureau of Labor Statistics recently released the December consumer price index (CPI), revealing that beef and veal prices surged by 1% compared to the previous month and have skyrocketed by 16.4% year-over-year.
Within this category, beef steaks saw a notable increase of 3.1% in December alone, marking a 17.8% rise compared to the same month last year. Ground beef prices experienced a more modest monthly increase of 0.2%, yet they remain up 15.5% from a year ago. Interestingly, while beef roast prices dipped by 1.6% in December, they still reflect a significant annual increase of 17.5%.
BEEF PRICES HIT RECORD HIGHS AS NATIONWIDE CATTLE INVENTORY DROPS TO LOWEST LEVEL IN 70 YEARS
Beef prices have surged over the last year amid a decline in cattle inventory due to drought and mounting overhead costs. (Joe Raedle/Getty Images)
The increase in beef prices has significantly outpaced broader inflation metrics. The meats, poultry, and fish index rose by 0.5% monthly and 6.9% over the past year. In contrast, overall food prices increased by 0.7% in December and 3.1% year-over-year, while the all-items CPI index indicated a 0.3% rise last month and a 2.7% increase annually.
The surge in beef prices is largely attributed to a nationwide decline in cattle inventory, which has reached its lowest level in 70 years. WHY CHEAPER BEEF PRICES ARE STILL A LONG WAY OFF
Cattle ranchers have been forced to reduce their herds due to drought conditions affecting key ranching areas. Although some ranchers are beginning to slowly rebuild their herds, the process takes at least two years to raise full-grown cattle. Additionally, ranchers are grappling with rising overhead costs, including feed, labor, fuel, and equipment expenses.
Cattle ranchers are facing challenging market conditions as they evaluate decisions around rebuilding their herds. (Ty Wright/Bloomberg/Getty Images)
INFLATION HELD STEADY IN DECEMBER, REMAINING WELL ABOVE THE FED’S 2% TARGET
“Drought and rough economic conditions have left the nation’s cattle herd at its smallest level since 1951 at the beginning of last year,” economist Michael Szanto told FOX Business. He noted that ranchers are “skittish” about expanding their herds amid the volatility in the beef market and the broader economy.
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Szanto emphasized that “beef is intrinsically a very expensive meat to produce,” leading ranchers to be cautious about rapidly increasing production, especially if market prices fluctuate unexpectedly.
Omaha Steaks President and CEO Nate Rempe weighs in on surging beef prices ahead of the holidays, arguing that the U.S. needs to rebuild the herd.
Beef prices are on the rise, with American households facing increased costs for steaks, roasts, and burgers, as highlighted by the latest inflation data. The Bureau of Labor Statistics recently released the December consumer price index (CPI), revealing that beef and veal prices surged by 1% compared to the previous month and have skyrocketed by 16.4% year-over-year.
Within this category, beef steaks saw a notable increase of 3.1% in December alone, marking a 17.8% rise compared to the same month last year. Ground beef prices experienced a more modest monthly increase of 0.2%, yet they remain up 15.5% from a year ago. Interestingly, while beef roast prices dipped by 1.6% in December, they still reflect a significant annual increase of 17.5%.
BEEF PRICES HIT RECORD HIGHS AS NATIONWIDE CATTLE INVENTORY DROPS TO LOWEST LEVEL IN 70 YEARS
Beef prices have surged over the last year amid a decline in cattle inventory due to drought and mounting overhead costs. (Joe Raedle/Getty Images)
The increase in beef prices has significantly outpaced broader inflation metrics. The meats, poultry, and fish index rose by 0.5% monthly and 6.9% over the past year. In contrast, overall food prices increased by 0.7% in December and 3.1% year-over-year, while the all-items CPI index indicated a 0.3% rise last month and a 2.7% increase annually.
The surge in beef prices is largely attributed to a nationwide decline in cattle inventory, which has reached its lowest level in 70 years. WHY CHEAPER BEEF PRICES ARE STILL A LONG WAY OFF
Cattle ranchers have been forced to reduce their herds due to drought conditions affecting key ranching areas. Although some ranchers are beginning to slowly rebuild their herds, the process takes at least two years to raise full-grown cattle. Additionally, ranchers are grappling with rising overhead costs, including feed, labor, fuel, and equipment expenses.
Cattle ranchers are facing challenging market conditions as they evaluate decisions around rebuilding their herds. (Ty Wright/Bloomberg/Getty Images)
INFLATION HELD STEADY IN DECEMBER, REMAINING WELL ABOVE THE FED’S 2% TARGET
“Drought and rough economic conditions have left the nation’s cattle herd at its smallest level since 1951 at the beginning of last year,” economist Michael Szanto told FOX Business. He noted that ranchers are “skittish” about expanding their herds amid the volatility in the beef market and the broader economy.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Szanto emphasized that “beef is intrinsically a very expensive meat to produce,” leading ranchers to be cautious about rapidly increasing production, especially if market prices fluctuate unexpectedly.
