Cattle prices hit record highs, signaling pricier steak ahead

The price of beef products, such as steak and hamburgers, in supermarkets and the hospitality industry continues to rise. Globally, the supply of cattle is exceptionally scarce, causing cattle prices to surpass the previous record levels by a significant margin in recent weeks. In the Netherlands, the carcass price is now nearly 9% above the previous record. Prices are expected to continue rising. This is reported by market research firm DCA Market Intelligence, which, as a Price Reporting Agency (PRA), provides the food and agribusiness sector with independent benchmark prices, market data, and market insights.

The Dutch quotations (Vee & Logistiek) for beef cattle have far surpassed the record levels reached shortly after the invasion of Ukraine. Since the previous record was matched four weeks ago, the price of top-quality cattle in the Netherlands has risen by 8.9% to €6.40 per kilo. This is an exceptionally strong increase in a short period for the usually quite stable beef market,” notes Matthijs Bremer, meat & protein market specialist at DCA Market Intelligence. “Price increases of more than five cents per kilo are rare, but in recent weeks, prices have sometimes risen by as much as 25 cents per week.

The high prices are the result of global shortages. Worldwide, the number of cattle is exceptionally low. In the United States, drought has led to the smallest cattle herd since 1952. Neighboring countries Canada and Mexico are also experiencing limited supply. Meanwhile, Europe is facing a significant decline in the number of beef cattle, particularly in France.

During the Christmas period, an exceptionally high number of cattle were slaughtered to meet the strong demand. This has further strained the already tight market. In countries like Brazil and Australia, where cattle are still more readily available, meat exports are now running at full capacity to partially offset shortages elsewhere. “However, this is not enough to curb the sharp price increase,” says Bremer.

Disrupted Supply
The price surge initially started in the most premium segment. Due to shortages, consumers increasingly traided down to cheaper alternatives. This shift has caused prices for all beef categories, including lower-end cuts, to rise sharply. For now, there is no end in sight to this trend. “Prices have skyrocketed at an alarming pace, but the market sentiment suggests that this is only the beginning,” says Bremer. Supply is becoming increasingly unstable. “The main reason is that cattle are being slaughtered at a younger age, creating a vicious cycle. Because younger cattle are being slaughtered, carcass weights decrease, resulting in lower meat production per animal.”

An end to the price surge is not yet in sight, although this trend cannot continue indefinitely. “There is always a limit to what consumers are willing to pay, especially now that purchasing power is already under pressure. Eventually, the tide will turn,” says Bremer. However, it remains uncertain when that tipping point will be reached. One thing is certain: “Many consumers will likely notice the impact on their receipts in the coming months when they scan a steak or hamburger at the supermarket checkout.”

DCA Market Intelligence
As a Price Reporting Agency (PRA), DCA Market Intelligence provides the food and agribusiness sector with independent benchmark prices, market data, and market insights. Based in Lelystad, the company is a leading price reporter in the world of agricultural commodities such as dairy, potatoes, onions, livestock, and meat.