Steak prices fall as beef supply starts to catch up with demand

Good news at the grocery store for a change! After many months of rising prices on everything from gas to groceries, prices for certain cuts of beef are falling — at least for now.

According to Information Resources, Inc. (IRI), while inflation continues to be an issue for consumers, the overall cost of beef dropped by 0.3% between June and July 2022. It dropped another 0.7% during the four-week period ending on Aug. 7.

The biggest reduction in beef prices comes from cuts such as ribeye, beef loin and brisket. In other words, steak and barbecue fans have some reasons to celebrate.

How Much Have Beef Prices Dropped?

Prices for meat went up when the pandemic started thanks to short-staffed plants, the USDA reports. This negatively impacted the wallets of American households, leading to a 14.5% increase in spending on meat in 2020. Prices continued to rise due to higher transportation, labor and ingredient costs.

Prices for beef peaked in Oct. 2021, then dropped. According to IRI numbers shared by The Wall Street Journal,  another dramatic drop took place in late March of 2022.

• Ribeye steak hit a high of a 41.7% price increase on Oct. 31, 2021, compared to the previous year. As of Aug. 7, prices are 9.3% lower than the previous year.
• Chuck beef peaked at a 24.1% price increase over the previous year on Oct. 31, 2021. Now, as of Aug. 7, prices are down 3.3% overall compared to last year’s cost.
• Beef loin also is down about 10% in the last four weeks compared to a year ago.

Why Are Beef Prices Dropping?

Customers are seeing lower prices for these beef products at the meat counter for a couple of reasons.

First, as overall inflation continues to challenge people’s budgets, more consumers are using cheaper cuts of meat when they cook at home. This is why ground beef prices have not seen the same type of fall-off as some of the more expensive cuts.

Meanwhile, on the manufacturing side of the market, meat processing plants have started to break the backlog of work to better meet customer demand. More workers at the plants mean more products can be shipped to grocery stores and meat markets.

“We’re getting healthier from a labor perspective,” Shane Miller, the head of Tyson Food’s beef and pork unit, told the Journal. “We’re running more volume to our plants.”

Price Reductions May Not Last, Though

However, many believe a drought across part of the U.S. may reverse this trend. Extended dry weather is forcing some cattle ranchers in places like California to cull their herds because they can’t sustain them, due to a lack of water, too much withered grass and high grain prices.

The USDA expects beef production to drop 7% in 2023, Business Insider reports, and prices could stay elevated for years to come.

All of this means if you’ve been craving a nice, grilled steak on the grill before the summer season ends, now might be the perfect time to pick up a great deal on your favorite cut of beef.

This story originally appeared on Don't Waste Your Money. Checkout Don't Waste Your Money for product reviews and other great ideas to save and make money.