Beef Prices Could Hit ‘Record Levels' This Year, Economist Warns

From McDonald's Egg McMuffin to lunch meats at Walmart, elevated prices for a plethora of popular food items remain major points of frustration for American consumers. Now, grocery shoppers may have to contend with even more price hikes for a staple protein: beef.

Bernt Nelson, an economist with the American Farm Bureau Federation, just published a report on the state of cattle inventory in the United States in 2024. Citing data from the USDA, Nelson noted that there were 87.2 million cattle and calves in America as of Jan. 1, which is 2% lower than the same time period in 2023.

That's also the lowest January cattle inventory since 1951, when there were an estimated 82.08 million cattle and calves in the country, Nelson added. Consumers, unfortunately, may end up paying more for their beef in the future thanks to this significant drop in supply.

These potential beef price increases won't take effect just yet. Nelson explained that while the total cattle population is down, the number of cattle and calves heading to market is actually 2% higher right now than it was a year ago.

"This means there are still plenty of cattle available to meet packer needs for now, which will keep beef prices from skyrocketing in the short term," he wrote.

However, as the current supply of marketable cattle starts to dwindle, the recent drop in overall inventory means that there won't be as many new cattle around to take their place. That could cause costs to skyrocket.

"This could send beef prices to record levels in 2024 and 2025, as we hit the supply bottom of the current cattle cycle," Nelson warned.

Restaurants, particularly steakhouses like Texas Roadhouse, have already been feeling the pressure from soaring beef costs and raising prices as a result. While demand for beef in the United States is still high for the time being, it remains to be seen if consumers will be willing or able to pay for pricier beef, Nelson concluded.

Beef isn't the only common grocery store food that may give shoppers some sticker shock this year. CoBank, a cooperative bank that provides financial services to several industries in rural America, published a report earlier this month revealing that price increases for chocolate "are likely" in 2024 as well.

A nearly 65% surge in cocoa prices since last year is to blame for these potential upcoming chocolate price hikes. CoBank expects manufacturers to roll out price increases for the confection to offset those elevated costs, so don't be too surprised if you end up paying more for your favorite candy bars in 2024.