Price of red meat soars in the US due to livestock shortage

The prices of the Red meat reach record levels in USAdriven by strong consumption but above all by a progressive reduction in herding bovinegreatly affected by the drought.

Mary Skinner must eat red meat. Her doctor told her to. “I have an extreme need for protein.”explains this sexagenarian as she leaves the Grand Central market in New York. “Before I could buy a steak or a steak. But now, more and more I turn to meat chopped”, less expensive, he explains.

Although inflation moderated to 3.7% In the 12 months to September in the United States, in the case of the best retail beef cuts, the increase reaches 9.7% in a year. In three years, steak, the most sought-after cut corresponding to beef tenderloin, jumped 27%.

The skyrocketing price of beef thus exceeds general inflation. In the same market, a 30-year-old man from Connecticut explains that he joined the delivery service ButcherBox to reduce costs.

“I receive about six cuts, for about US$150-160 every two or three weeks,” explained this entrepreneur who did not want to give his name. ““The price clearly went up.” summarized.

“There came a point where I started buying meat that requires slow cooking, is cheaper and will last longer,” he added.

The blow of the drought

The United States, with an image closely associated with ranches and huge cattle herds, suffers from a livestock shortage.

“The herding of beef cattle is at its lowest since the 1960s.”said Scott Brown, a professor at the University of Missouri. In five years, the number of cattle decreased almost 10%according to figures from the US Department of Agriculture (USDA).

“The main reason is the drought” that has hit breeding regions, particularly the Great American Plains, “for several years,” explained Scott Brown, who places the origin of this phenomenon in the fall of 2020.

The lack of rain reduces the volume of pastures on which livestock feed, and drives up the price of forage.

In this difficult context, ranchers massively reduced the number of animals they feed. In 2022, meat processing plants reached the highest levels of slaughter “since the early 1980s”highlights Ross Baldwin, from the agricultural consulting firm AgMarket.Net.

This reduction in overall herd was amplified by increased mortality, as many animals succumbed to a brutal heat wave in August, compounded by above-average ambient humidity.

Farmers partially compensate for these losses because they have improved cattle, which produce more volume of meat than 10 years ago, and the possibility of achieving more cows with successful calving, Brown clarifies.

But at the same time, the demand for red meat is increasing. In 2022, Americans ate an average of 26.8 kg of beef (about 500 g per week), 0.3% more than in 2021. Meanwhile, since 2015, consumption growth was almost 10%according to the USDA.

With reduced supply and increasing demand, the wholesale price for livestock is more than double what it was in March 2020 (+133%).

Attracted by record prices, many farmers sell their animals earlier, at a lower age and weight, and that prevents the beef population from growing, says Ross Baldwin, who does not expect changes in the general situation in the next 12 months.

“It will take another three years (since the next one) for the population (of cattle) to really begin to increase”held.

Meanwhile, “keeping calves for reproduction (…) would lower meat production in the short term, and prices would rise” even more so, warns David Anderson, a professor at Texas A&M University.

Finding enough pasture for a reconstituted and increased herd would also be a challenge.

“The southeast had a drought, but not as much as the rest of the country,” Scott Brown highlights when referring to this region with low livestock density. “Could it happen that beef cattle are moved there? Could occur”. The USDA anticipates a new decline in livestock production in 2024.

“Retail prices will remain firm and, in the end, that will lead consumers to question whether to pay so dearly” the product, predicts Ross Baldwin.

According to this analyst, the market could adjust due to an exhaustion of demand, although at the moment it does not show any sign of a change in trend.

Source: AFP