Because of high feed prices and severe drought across much of the U.S., a significant number of cattle farmers and ranchers have reduced their cattle herds, which has led to higher beef prices. Ground beef prices have risen ten percent in 2022 compared to 2021.
Grain prices have dropped to their lowest levels since Russia invaded Ukraine, but Reuters says that might not mean lower food prices right away at the grocery store.
Corn futures have dropped by 26 percent since they hit a 10-year high in April after the Ukraine conflict sparked supply worries. However, those corn prices are still nine percent higher than last year.
While the lower prices benefit livestock producers, U.S. government data showed on July 1 that producers had already lowered the nation’s cattle herd by approximately two percent compared to last year. Because of continuing drought in cattle country, producers will likely still have to liquidate even more cattle.