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Raising the Steaks: The Story Behind Rising Beef Prices 

By January 19, 2024January 23rd, 2024No Comments
Raising the Steaks: The Story Behind Rising Beef Prices

At the end of 2023, shoppers were warned that they were facing record prices for Beef, surpassing even the heights witnessed during the peak of the pandemic. The United States finds its national cattle herd at a 61-year low, attributed to persistent droughts in the southern and western regions that have driven up the costs of feed. Traditionally, farmers would compensate for the shortage in natural grazing by supplementing it with hay, but these too have been affected by the droughts. Supplies of other alternates like Soy and Wheat have been affected by geopolitical events, such as Russia’s invasion of Ukraine.

With little indication of prices abating soon, Engage3 has meticulously examined Beef pricing trends in the United States over the past year to unravel the areas where prices are rising the fastest.

Key Takeaways 

  • The Effective price of Beef has risen 7.9% since the start of 2023. 
  • Price rises were lower on cheaper cuts of Beef like Chuck Steak (+5.0%), Round Steak (+5.0%) and Chuck Roasts (+7.0%). This appears to be retailers making a conscious effort to limit the effect to those more price sensitive shoppers. 
  • Ground Beef offered some respite to shoppers with the Effective price falling 3.0% since the start of November 23. 
  • Regional disparities were evident in beef pricing, with New York State witnessing more substantial increases (Beef Roasts +9.6%) compared to Maryland (Beef Roasts +5.3%). 

Everyday prices of Beef have grown by an average of 6.2% over the year 

Engage3’s analysis shows that the Everyday price of Beef has risen 7.9% over the past 12 months, surpassing the 6.2% rise in the Everyday price during the same period. This Effective price surge occurred at a greater rate due to a 15% reduction in promotional activity at the end of the period compared to the beginning 

The categories most frequently listed, such as Ground Beef, Beef Roasts, and Beef Steaks, experienced significant growth in Effective prices. Among these, Beef Roasts witnessed the most substantial increase, with prices rising by 9.0% for Effective prices and 6.9% for Everyday prices. In contrast, Beef Ribs exhibited the smallest increase, with Effective prices seeing a modest rise of only 2.5%. 

Raising the Steaks: The Story Behind Rising Beef Prices

Cheaper Beef cuts had the lowest price rises 

Looking into each cut of beef we found that in Beef Steaks, Ribeye steaks experienced the most significant increase in Effective prices over the year at 8.7% ahead of Sirloin Steaks (+7.8%) and New York Strip Steaks (+7.0%). Conversely, the more economical Round and Chuck Steak cuts exhibited the lowest price increase, standing at 5.0%. 

In the Roasts category, the trend of more affordable cuts registering lower increases persisted, with Chuck Roasts showing a 7.0% rise in Effective price, and Sirloin experiencing a modest 2.5% increase. Ribeye and New York Strip Roasts again had the greater price increase at 12.4% and 15.1%. This pattern of lesser price increases for cheaper cuts suggests a deliberate effort by retailers to minimize the impact on consumers who are more price sensitive. 

80% Lean Ground Beef had the smallest increase in price rises 

Within Ground Beef, 80% Lean was the most listed fat content product and exhibited the lowest price increase at 5.7%. Ground Beef with fat content ranging between 73% and 75% experienced the most substantial price increase, reaching 9.9%, with the majority occurring in May 2023. However, since November 23 its Effective price fell 6.7%. Overall, the price of Ground Beef has fallen by an average of 3.0% in the last 2 months. 

The leanest Ground Beef (95%+) had the second greatest increase in prices at 8.2%. The observation that the most frequently listed fat content, 80%, incurred the lowest price hikes, again, suggests a strategic effort by retailers to alleviate the impact of increases on the most sought-after items for shoppers. 

80% Lean Ground Beef had the smallest increase in price rises

New York state had greater price increases than other northeastern states 

Regionally, the fluctuations in Beef prices exhibit significant disparities. Our examination focused on Beef pricing across four northeastern states, evaluating retailers present in all four regions. A consistent set of Beef products was analyzed in each state, revealing that New York witnessed a greater rise in prices compared to other states.

In the past 12 months, the Effective price of Beef Roasts surged by an average of 9.6% in New York, contrasting with a more modest 5.3% increase in Maryland. New York also had the highest average increase in Beef Steaks at 8.4%, with New Jersey experiencing a comparatively lower rise at 7.4%. Pennsylvania followed closely behind, ranking as the second highest in both Beef Roasts and Steaks with increases of 7.3% and 8.1%, respectively.

New York state had greater price increases than other northeastern states

Ground Beef and cheaper Beef cuts offer some respite for shoppers 

Although there are no overt indications of an overall decline in Beef prices, there is a glimmer of hope for shoppers. Ground Beef prices have witnessed a 3% decrease since November 2023, suggesting that retailers are making efforts to alleviate price hikes, particularly on more budget-friendly cuts like Chuck Roasts. This initiative provides a measure of relief for price-conscious shoppers. 

Engage3 will be closely monitoring the situation to see if prices start to fall. Click here to request more insight into Beef pricing or to find out how Engage3 helps retailers and brands improve their pricing  performance and compete more profitably through data science & analytics.