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Why are beef prices so high? And when will they come down?

Meat prices
Posted at 5:00 AM, Feb 03, 2022
and last updated 2022-02-03 07:04:28-05

HEBER, Calif. — Families across the country are dealing with sticker shock when they go to buy beef at the grocery store.

Beef prices are up around 20% compared to the same time in 2021.

So, what's behind the hike? And will President Joe Biden's recent initiative to lower the costs actually help?

TALKING TO A CATTLEMAN

To understand why beef is so pricey, it helps to speak with a cattleman.

Jesse Larios, a longtime cattleman and beef advocate in Imperial Valley, California, says there isn't one simple answer to explain the hike. However, he says meat processing plants are part of the issue.

"We got more livestock than harvest capacity in the United States," Larios said. "We don't have enough plants to process them all."

In many cases, the companies Larios and his fellow cattlemen work with have been told the plants don't have enough workers due to COVID-19.

PRESIDENT BIDEN'S PUSH

The Biden administration is attempting to fix some of the problems through policy changes.

At a recent roundtable event, Biden pledged $1 billion to increase meat capacity at smaller, more independent companies to help production. The goal is to have the smaller companies compete with larger meat processors that control most of the market.

Biden's top economic adviser, Dr. Cecilia Elena Rouse, believes the program will eventually lower prices at the grocery store.

She expects prices to gradually improve over the course of 2022.

"Most outside forecasters say inflation will be half that it is today by this time next year," she said.

BACK AT THE FEEDLOT

Larios likes the White House plan, but he cautions costs are high for other reasons, too.

For instance, corn costs have also skyrocketed. Larios is paying $2 more a bushel. He believes the higher price is due to higher oil and gas prices.

When Larios pays more for corn, that cost has to be passed on to someone.

It may be hard to believe, but when gas prices are high, more people want to buy corn since corn can produce fuel alternatives like ethanol, Larios said.

"Will beef prices go down? Yes, I do believe they will," Larios said.

However, Larios does not believe the prices will go back to what they were before the pandemic.