Why are US Beef Prices Soaring?

Food in the US is getting more expensive, and that’s largely being driven by rising beef prices. In the past year, the consumer price index for food rose 0.9%, while the index for beef rose 17.6%, according to the Bureau of Labor Statistics.

So what’s happening? At the height of the pandemiccovid-19 outbreaks forced meatpacking facilities to shut down, reducing beef production. But they never recovered entirely, said Michael Swanson, the chief agriculture economist at Wells Fargo. Part of that, he said, has to do with labor shortages that have slowed down production, from the food workers processing the beef to the truck drivers transporting it. The ongoing supply chain challenges such as rising freight rates are also affecting meat production along with the broader global economy. Rising corn and soy prices, which make the feed for livestock more expensive, also factor into the soaring beef prices.

“Anytime you see price increases like that, it’s never one thing, it’s always a stack of things,” said Peter Bolstorff, an executive at the Association for Supply Chain Management. “[When] these prices go up that fast…usually it’s because you’ve got demand shocks and supply shocks stacking on themselves at the same time.”

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