Consumers can expect higher beef prices at grocery stores despite a recent dip after the typical seasonal peak around Memorial Day, according to a Texas A&M AgriLife Extension Service expert.

David Anderson, Ph.D., AgriLife Extension economist, Bryan-College Station, said retail beef prices remain above the five-year average, as supply and demand factors continue to contribute to higher-than-normal prices.

Retail beef prices are lower than this time last year at the height of the pandemic, when panic buying and packing plant closures drove prices upward, Anderson said.

Anderson said choice retail beef prices were $6.96 per pound compared to $7.59 per pound a year ago during the pandemic. While prices are lower than a year ago, they have been on the rise this year. Choice average beef prices have increased from $6.41 to $6.96 per pound since the first of the year.

The recent price changes for beef are consistent with historic seasonal peaks and valleys, but prices remain above the five-year average of $5.82 per pound. Anderson said he expects market conditions to keep prices up.

Cuts like rib-eye steaks skyrocketed this spring through Memorial Day weekend, which typically marks the kickoff to grilling season and the annual seasonal peak for retail beef prices, Anderson said. Rib-eye cuts were $13.18 per pound wholesale heading into the holiday and settled at $10.36 per pound this week.   

“We’re seeing tighter supplies across the board on all proteins as there continues to be strong demand here at home and booming exports,” he said. “Beef cuts calmed down a little after the typical season price spike around Memorial Day, but it looks like higher prices at grocery stores are here for the foreseeable future.”

Extraordinary demand for retail beef

Anderson said the economic recovery continues to drive strong demand for beef. Restaurant demand for beef has put increasing pressure on supplies — especially higher-value cuts like rib-eye and tenderloin — as people look for opportunities to dine out.

Demand for beef at grocery stores has not waned as restaurant capacities rise, he said.

“There is extraordinary demand right now,” Anderson said. “We’re coming out of the pandemic, and people want to get out, and restaurants are meeting that pent up demand. But purchases at grocery stores haven’t slacked off, even with the reopening. The combination is fueling higher retail prices as a result.”

But higher costs to produce beef and move it through the supply chain to grocers and restaurants are also feeding higher costs for consumers, he said. The same market factors are affecting other proteins like chicken and pork.

Feed, fuel and labor costs are all higher on the supply end as lower unemployment and economic growth push demand higher, Anderson said.

“I would argue that the problem is still a lingering bottleneck in terms of a shrinking herd, packing capacity, trucking capacity to move product around the country, and all the moving parts that get us from the farm to the plate,” he said. “Part of that is the turmoil we’ve experienced during the pandemic and the volatility it introduced to the market. I think this is the latest round of volatility that we’re working through after a year and a half.

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