America is running out of beef (the food kind)

Someplace, somewhere, the Eat Mor Chikin cows are fist hoof pumping. Because US beef production is on track to drop by more than 2 billion pounds next year, its biggest annual decline since 1979, according to Agriculture Department data.

🥩📉 Where’s the beef?... Production has been on the decline since early 2020, when many meatpacking plants temporarily shut down due to Covid infections among workers. According to the USDA, daily capacity at US cattle and hog facilities temporarily declined as much as 45%.

And even once the plants were back up and running, the problems continued. Over the next year, meatpackers ran into issues recruiting enough workers to fully run their plants and had trouble meeting consumer demand.

But meatpackers are just one part of the beef supply chain – which, according to the WSJ, also includes feedlots. Feedlots fatten the cattle and sell them to meatpacking companies, which then slaughter the livestock and sell the meat to food companies, retailers, or restaurants (feedlots → meatpackers → grocery stores and restaurants). A disruption in one part of the chain can throw everything off.

• For example: inflation has driven up the cost of everything in the supply chain, from food to fuel to equipment. Many ranchers have thinned their herds to save money as a result.
• Combine this lack of supply with strong consumer demand and higher costs – and there you have a prime recipe for higher beef prices.

📈 Case in point: Prices for ground beef have gone up 20% since summer 2020, and could hit record-highs this upcoming summer, according to analysts.