Beef prices soar as American families pay steep prices for steaks and burgers nationwide
Steak prices surged 17.8% in latest inflation data
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Beef prices are surging, and American households are forking over more money for their steaks, roasts and burgers, the latest inflation data shows.
The Bureau of Labor Statistics released the December consumer price index (CPI) which showed that prices for beef and veal rose 1% compared with prices the month before and are up 16.4% from a year ago.
Within that category, prices for beef steaks jumped 3.1% in December and are up 17.8% when compared with the same month in the prior year.
Ground beef prices rose more modestly on a monthly basis, rising 0.2% in December, but are up 15.5% from a year ago. Beef roast prices declined by 1.6% in December but were still up 17.5% on an annual basis.
BEEF PRICES HIT RECORD HIGHS AS NATIONWIDE CATTLE INVENTORY DROPS TO LOWEST LEVEL IN 70 YEARS
Beef prices have surged over the last year amid a decline in cattle inventory due to drought and mounting overhead costs. (Joe Raedle/Getty Images)
The rise in beef prices significantly outpaced the broader inflation gauges, as the meats, poultry and fish index increased 0.5% on a monthly basis and 6.9% over the past 12 months.
Overall food prices were up 0.7% in December and 3.1% from a year ago, while the all-items CPI index showed inflation pushed prices 0.3% higher last month and 2.7% on an annual basis.
Beef prices surged in the last year as the nationwide cattle inventory declined to its lowest level in 70 years.
WHY CHEAPER BEEF PRICES ARE STILL A LONG WAY OFF
Cattle ranchers have reduced their herds due to drought affecting key ranching regions in recent years, though some have started to slowly rebuild them. It takes at least two years to raise full-grown cattle.
Overhead costs for cattle ranchers have also climbed, with feed, labor, fuel and equipment expenses trending higher.
Cattle ranchers are facing challenging market conditions as they evaluate decisions around rebuilding their herds. (Ty Wright/Bloomberg/Getty Images)
INFLATION HELD STEADY IN DECEMBER, REMAINING WELL ABOVE THE FED'S 2% TARGET
"Drought and rough economic conditions have left the nation's cattle herd at its smallest level since 1951 at the beginning of last year," economist Michael Szanto told FOX Business.
He added that ranchers are "skittish" about expanding their herds amid volatility in the beef market and economy at large.
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"Beef is intrinsically a very expensive meat to produce, and ranchers will be very cautious in rapidly ramping up production so as to not get burned if the price movement suddenly turns downward," Szanto added.