Omaha Steaks President and CEO Nate Rempe speaks out on soaring beef prices as the holidays approach, saying the U.S. needs to replenish the herd.
Beef prices are rising sharply and US households are spending more money on their steaks, roasts and burgers, the latest inflation data shows.
The Bureau of Labor Statistics released the December report consumer price index (CPI) which showed that beef and veal prices increased by 1% compared to the previous month’s prices and by 16.4% compared to last year.
In this category, prices for beef steaks jumped 3.1% in December and are up 17.8% compared to the same month of the previous year.
Ground beef prices increased more modestly on a monthly basis, increasing 0.2% in December, but up 15.5% from last year. Roast beef prices fell 1.6% in December, but remained up 17.5% on an annual basis.
BEEF PRICES REACH RECORD LEVELS AS NATIONAL CATTLE INVENTORY FALLS TO LOWEST LEVEL IN 70 YEARS
Beef prices have surged over the past year amid falling livestock stocks due to drought and rising overhead costs. (Joe Raedle/Getty Images)
Rising beef prices have far outpaced broader inflation indicators, with the meat, poultry and fish index rising 0.5% on a monthly basis and 6.9% over the past 12 months.
Overall food prices rose 0.7% in December and 3.1% from a year ago, while the all-items CPI index showed inflation pushed up prices 0.3% more last month and 2.7% on an annual basis.
Beef prices surged last year as the nation’s cattle inventory fell to its lowest level in 70 years.
WHY CHEAPER BEEF PRICES ARE STILL A LONG WAY
Cattle ranchers have reduced their herds due to drought in major livestock regions in recent years, although some have started to slowly rebuild them. It takes at least two years to raise adult livestock.
Overhead for cattle breeders have also increased, with expenses for feed, labor, fuel and equipment trending upward.
Livestock producers are facing challenging market conditions as they evaluate decisions about rebuilding their herds. (Ty Wright/Bloomberg/Getty Images)
INFLATION MAINTAINED IN DECEMBER, REMAINING WELL ABOVE THE FED’S 2% OBJECTIVE
“Drought and tough economic conditions left the nation’s cattle herd at its smallest level since 1951 early last year,” economist Michael Szanto told FOX Business.
He added that breeders are “fearful” about expanding their herds amid price volatility. beef market and the economy in general.
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“Beef is inherently a very expensive meat to produce, and ranchers will be very careful in rapidly increasing production so as not to get burned if the price movement suddenly turns downward,” Szanto added.
