Why Is Beef So Expensive? - NerdWallet

Beef is so expensive right now because drought, high grain prices, inflation and rising interest rates made cattle farming a costly endeavor in recent years. To deal with rising operating costs, many U.S. cattle farmers reduced the size of their herds — and some got out of the business altogether. As a result, the U.S. cattle inventory is the smallest it’s been since 1951.

Tariffs add another wrinkle. President Donald Trump has instituted wide-ranging tariffs throughout his second term, many of which included beef and other agricultural products imported into the U.S. Trump rolled back some food-related tariffs in November.

The cost of tariffs are typically passed through to consumers.

• Inflation drove up input costs, which haven’t receded, making it expensive all around to care for livestock.

• Drought conditions continue to impact pastures in cattle regions, which can force producers to spend more on feed.

• Record-high prices can be good for farmers selling cattle. But anyone looking to expand their herd is paying those same sums.

• High interest rates mean producers are paying more for operating loans, which many rely on to run their businesses.

Tariffs will have a definite impact on consumer prices that could last for years. The beef industry relies on both imports and exports, and it’s no simple task to find new markets and reroute global supply chains. Prices will rise in the short-term while producers decide how to adapt to the new conditions. And long-term, it’s unclear whether tariffs will leave producers better off or worse, which would have consequences for prices.