What's causing record high US beef prices?
📰 source: bbc_business · 💼 business
beef prices at us supermarkets hit record highs — 12% higher than a year ago, more than triple the rate of inflation. but the ranchers, feedlots, and meatpackers in the supply chain say they're not making any more money. south dakota rancher eric gropper sells calves for around $2,500, up from $2,000 two years ago, but his costs have jumped just as much: a pick-up truck that cost $40,000 now runs $100,000, a fence post went from $6 to $19, and barbed wire doubled. with over 60% of us cattle grazing on drought-hit land, he's also buying hay and fodder.
feedlot companies pay record prices for calves but sell at record highs, so no extra profit. meanwhile the four big meatpackers — tyson, jbs, cargill, national beef — control 85% of processing, but tyson lost more than $500m on beef in the first half of its financial year. smaller packers like harpley's in north carolina run below capacity and lose $100-$400 per head.
restaurants like block 16 in omaha have raised burger prices from $8.95 to $11.95, but won't go to $13. everyone is turning over more money, but keeping none of it. and the supply won't fix itself fast: a heifer takes two years to produce a calf, and that calf needs another year to reach slaughter weight.
why it matters: record beef prices show supply-chain cost squeeze: high prices don't guarantee profits, and cattle supply won't recover for years.
source: bbc_business
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