Eggs are not the only expensive food: Beef prices are also on the rise
It’s not just eggs getting expensive. Beef prices have also been on the rise, with executives at various companies noting in recent earnings calls that it’s creating significant challenges.
In January, prices for beef and veal rose 5.5%, outpacing the entire food-at-home category, which rose 1.9%, according to the Labor Department’s Consumer Price Index.
Courtney Schmidt, Sector Manager at Wells Fargo Agri-Food Institute, told FOX Business the uptick in beef prices is driven by tighter U.S. beef production with consistent consumer demand.
EGG PRICES PREDICTED TO JUMP OVER 40% IN 2025: USDA
Currently, the U.S. cattle herd is experiencing a down cycle, with cattle inventories at historically low levels in 2025, according to Schmidt.
Earlier this month, Bernt Nelson, an economist with the American Farm Bureau Foundation, reported that the U.S. cattle and calf inventory as of Jan. 1, 2025, was down about 1% from the previous year, highlighting the ongoing decline of U.S. cattle herds.
Nelson also pointed out that the price for fed steers, or cattle ready for slaughter, has recently reached record highs, benefiting sellers but posing challenges for buyers. He noted that these high prices could prevent farmers from expanding their herds.
“Calf prices are also strong, which presents an opportunity for cow-calf producers. If these calves are retained or sold for breeding, it will remove more cattle from the beef and tighten supplies further before possible expansion with the 2026 generation of calves,” Nelson said.
Currently, the industry is not experiencing what Nelson describes as a typical cattle cycle, where high prices lead to herd growth. While prices are strong, uncertainty remains high.
The high cattle prices and unpredictable future profits might force farmers to sell more female cattle for beef rather than keep them for breeding. If that happens, the cattle industry could keep shrinking.
In turn, prices could rise even more.
AMERICANS TAKE TO RAISING THEIR OWN CHICKENS AMID NATIONWIDE EGG SHORTAGE
Major retailers and fast food companies have been keeping an eye on beef prices, which has impacted their guidance for the 2025 fiscal year.
Walmart CFO John David Rainey told FOX Business that food is “slightly inflationary,” which is really due to a few items like eggs, bacon, some other meats.”
Wendy’s CEO Kirk Tanner also told analysts that beef prices are driving .
“Embedded in our 2025 guidance is commodity inflation of about 1% and wage rate inflation of about 4%,” Tanner said. “We think beef will be the biggest driver of that increase year over year.”
The company also expects to see a little bit of pressure on bacon, according to Tanner.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Similarly, Shake Shack CFO Katie Fogertey told analysts that its “commodity outlook reflects our expectations for low single-digit inflation led by beef up mid- to high single digits.”
The good news, according to Schmidt, is that the situation is aiding the chicken and pork industries, which “are both rebounding from industry downturns.”
“Improving consumer demand and supply corrections have resulted in price improvements for these meats,” according to Schmidt.
2025-02-27 12:00:25
