Why is meat so expensive

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Joseph Zeballos-Roig and Madison Hoff. Food prices are on the rise, particularly for beef, per new data from the Labor Department. Increases could further strain family budgets, but experts say it won't last forever.

Read: How meat producers have influenced nutrition guidelines for decades. Meatpacking is becoming a more concentrated industry. Even as prices moved down in the early s and up again in the early s, the Big Four packers have been able first to increase, then to maintain, their level of profitability.

In less concentrated food industries, notably eggs, prices did not rise nearly as much in —21 as did prices of meat, and especially beef. Without denying the supply-and-demand explanation altogether, the Biden administration wants to act to multiply competition in the meatpacking industry.

It hopes that more competition will raise the prices that packers pay to ranchers and cut the prices consumers pay at the store.

Worse, from a Biden administration perspective, meatpackers faced by intensified competition have another option besides paying more to ranchers or charging consumers less: They can squeeze their own costs by, for example, automating workers out of jobs. The architects of the Biden plan are uneasily aware that it rests on a lot of hopes, guesses, and optimistic assumptions. When pressed on the unlikelihood that their plan will deliver any near-term relief to either ranchers or consumers, they reply that the more fundamental goal of their plan is to improve the resiliency of the U.

In August , a fire badly damaged one of the seven largest meatpacking plants in the United States, near Holcomb, Kansas. At a stroke, the U. In May , a cyberattack temporarily closed all of the U. That attack disrupted one-fourth of the U. Multiplying the number of smaller if perhaps less efficient suppliers can provide some cushions against such shocks in future. But how would that hope work in the real world? The Big Four came to dominate beef packing as they do precisely because theirs is an industry where larger size translates into lower costs and greater efficiencies.

The demand for meat remains strong in part due to excess household savings, according to analysts. But that is forcing retailers to raise prices to ration the limited supply, said Swanson.

The climbing prices are also leading restaurants to change up their ingredients to soften the blow of rising costs. Other drivers of high prices may persist longer. Cattle herds will take time to recover, and higher wages may be permanent, said Sal Guatieri, senior economist at BMO Capital Markets, a Toronto-based investment firm. By providing your email, you agree to the Quartz Privacy Policy. Skip to navigation Skip to content. Discover Membership.