Hamburger Prices Might Continue To Rise As US Cattle Herd Shrinks

Hamburger Prices Might Continue To Rise As US Cattle Herd Shrinks

Consumers grappling with elevated food inflation might be in for another surprise: A shrinking US cattle herd indicates tight livestock supplies for years. 

A decline in cattle herds and high production expenses will translate into higher beef prices at the grocery store. We documented this trend last fall (read: “Dwindling US Cattle Herd Implies Supermarket Beef Prices May Rise Even More). 

Bloomberg explained the reason for the drop: 

Years-long drought in the US Plains has withered pastures and squeezed supplies of feeds including hay and corn. The result: ranchers have liquidated some animals to cut costs, depressing breeding.

The latest figures from the US Department of Agriculture cattle-inventory report on Tuesday showed 89.3 million cattle as of Jan. 1, down 3% from a year ago. The decline wasn’t unexpected and was in line with a Bloomberg survey. 

However, a much more significant decline in beef production could be nearing. If not this year, perhaps between 2024-26. 

“With fewer cattle supplies becoming available, beef production is expected to undergo a sizable decline over the next few years,” said Courtney Shum, a livestock-market reporter at Urner Barry, an industry publication.

What’s alarming is the shrinking herd of beef replacement cows has fallen to 1962 levels. 

Don Roose, founder of US Commodities, a grain and livestock investment and management firm, warned:

“We’re still in the contraction phase.

“It takes a long time to build a herd back up again.”

Meaning beef prices at the supermarket might go higher until demand destruction hits. 

Soon, beef and eggs will be a delicacy for only the rich while everyone else ingests protein-rich insects

Tyler Durden
Wed, 02/01/2023 – 21:05

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