Hamburger Prices Might Continue To Rise As US Cattle Herd Shrinks

Consumers grappling with elevated food inflation might be in for another surprise: A shrinking US cattle herd indicates tight livestock supplies for years.

A decline in cattle herds and high production expenses will translate into higher beef prices at the grocery store. We documented this trend last fall (read: “Dwindling US Cattle Herd Implies Supermarket Beef Prices May Rise Even More“).

Bloomberg explained the reason for the drop:

Years-long drought in the US Plains has withered pastures and squeezed supplies of feeds including hay and corn. The result: ranchers have liquidated some animals to cut costs, depressing breeding.

The latest figures from the US Department of Agriculture cattle-inventory report on Tuesday showed 89.3 million cattle as of Jan. 1, down 3% from a year ago. The decline wasn’t unexpected and was in line with a Bloomberg survey. – READ MORE