By Jamie Martin
As Americans enjoy the final days of summer grilling, there's a small reprieve in beef prices from the record highs experienced in July.
Bernt Nelson, an economist with the American Farm Bureau Federation, highlights a recent drop in beef prices, noting that the USDA ERS reported the all-fresh beef value at $8.15 per pound in July, a historic first.
Despite this slight decline, the supply of cattle is expected to remain tight due to the long-term nature of cattle production. The current low inventory, a trend since 2020, continues to drive high prices.
Nelson explains that the ongoing contraction phase of the cattle cycle is fueled by stronger business incentives for farmers to sell cattle rather than expand herds.
For consumers, the reduction in beef prices might not seem significant, and it's important to note that the majority of the retail dollar does not reach the farmers. According to Nelson, farmers receive about 34 cents of every dollar spent on beef, with the largest share going to packers, highlighting the minimal control farmers have over market prices.
This scenario underscores the complex dynamics between retail beef prices, cattle supply constraints, and the economic pressures faced by farmers in the U.S. beef industry.
Photo Credit: american-farm-bureau-federation
Categories: National