Shoppers reeling from the skyrocketing cost of eggs because of a bird flu outbreak may soon see similar price hikes on beef and veal products because of shrinking herd levels, The Post has learned.
“There’s a perfect storm driving up beef and veal prices right now,” Joe Camberato, supply chain expert and chief executive at National Business Capital, told The Post.
Technically, it’s a lack of rainy storms that have wreaked chaos on the cattle industry as droughts and abnormally dry conditions hit ranchers and slaughterhouses hard.
Drought levels hit a nationwide record in 2024, critically impacting regions across the southwest and Northern Plains, according to Drought.gov.
Extremely dry conditions reduce the amount of grass available for grazing, making farmers more reliant on feed.
As demand for feed grew, prices became inflated, piling on new costs for ranchers and forcing them to shrink their herds.
Further hampering supply was a flesh-eating pest called the New World Screwworm discovered in Mexican cattle herds, forcing the United States to halt imports.
Prior to banning cattle imports last November, Mexico was sending about 1 million cattle to the US each year, according to the Department of Agriculture.
As of January, US cattle herds had shrunk 1% from the year before – hitting a 64-year low, according to government data.
“On top of all that, demand is still strong,” Camberato told The Post. “When you mix lower supply with high demand, prices go up. It’s that simple.”
Earlier this month, Washington resumed cattle imports from Mexico, but President Trump has threatened to levy hefty tariffs on the neighboring country, which could keep cattle prices high.
“We saw record prices at all the auction yards in January,” Jason Walker, co-owner of StarWalker Organic Farms in California, told The Post. “If you’re selling cattle, it’s a great thing. If you’re buying cattle, it’s not a great thing.”
Walker said herd shortages have experienced a “weird ebb and flow” as high demand and low supply sends the price of cattle shooting upward, tempting ranchers to sell more of their herd than usual.
“Normally, you’d have a system where the rancher would keep some of his animals back, re-breed them and add more animals to the system,” he told The Post.
Instead, when cattle are selling at higher prices, ranchers sell more of their animals into the slaughter plants than usual and don’t keep any back to breed – worsening the shortage issue at hand, he said.
“They’re gonna sit on that money and wait until the prices drop and buy back in again,” Walker said. “That’s going to increase the price at the supermarket, unfortunately.”
Prices at supermarkets have already been ticking up.
Last month, sirloin steak prices averaged $11.97 per pound, close to its record-high of $12.01, the Bureau of Labor Statistics said this week.
Ground beef cost an average of $5.55 per pound in January, near its record-high of $5.67, according to the Labor Department data.
The greater concern, however, is prices at the producer level.
The annual price increase for fresh or frozen beef products from slaughtering plants jumped a whopping 14.7% in January – compared to a 5.7% increase the same time last year, according to the Labor Department’s Producer Price Index.
Stubborn inflation – which rose 3% nationwide in January – has sent prices up along nearly the entire beef and veal supply chain, according to Hitha Herzog, chief retail analyst at H Squared Research and part-time faculty at Parsons School of Design.
“When you have factors like labor costs, higher energy costs and fluctuations in weather, these also have an impact on beef and veal production,” Herzog told The Post. “Farms and retailers don’t absorb the cost. Instead, it gets passed on to the consumer.”
