MARY LOUISE KELLY, HOST:
The cost of pretty much everything feels too darn high. Today, and for the next several weeks, NPR is bringing you a series about it. It's called Cost Of Living: The Price We Pay. And we're going to examine why and how consumers are coping. Robert Smith and Wailin Wong, with our daily economics podcast The Indicator from Planet Money, explain the long-term causes of a recent boom in beef prices.
WAILIN WONG, BYLINE: Laila Assanie is a senior business economist with the Dallas Federal Reserve, and she wrote about rising beef prices in the latest Beige Book. That's the eight-times-a-year report on regional economies released by the Federal Reserve.
ROBERT SMITH, BYLINE: Do you eat beef, or are you one of those notable Texas vegetarians?
LAILA ASSANIE: Oh, I enjoy both. You can call me an equal-opportunity eater. So I'll take a plate with Texas brisket on one side and grilled veggies on the other.
SMITH: Well, we're just coming out of Texas brisket season, the summer, all those barbecues. Is anyone out there talking about beef prices? I hear they've been going up, or so the Beige Book tells me.
ASSANIE: Yes, they certainly have been quite high. And for Texas, the barbecue season runs all 12 months. So whether it's corn on the cobs or ribs, something is always sizzling on the grill in Texas.
WONG: Laila wrote, quote, "cattle prices remained historically high amid solid demand and a decline in beef production. One factor limiting production was the suspension of cattle imports from Mexico, implemented last fall to protect U.S. livestock from the New World screwworm, a parasitic fly." Ew.
SMITH: Oh, I know. It sounds scary. So let's break this down. People are still eating a lot of beef. So demand is high.
WONG: Is this the age of, you know, Instagram and TikTok influencers telling us all to eat beef tallow fries?
SMITH: Yeah, right? But the supply of beef is down for a bunch of reasons. There are long-term reasons and new challenges.
So Laila, I know that the number of cows and bulls grazing out there in America has been gradually going down.
ASSANIE: So cattle inventory in the U.S. has been declining since the mid-1970s, but that trend has become a bit more pronounced over the past few years due to persistent droughts, higher feed costs and other economic pressures leading ranchers to liquidate their beef herds.
SMITH: In other words, kill the cattle and send them to market. But there is still not enough beef in the United States for American appetite. So we fill the gap by importing quite a bit of meat from places like Canada and Mexico.
But Laila, you mention in the Beige Book this infestation. The New World screwworm has kept out the Mexican beef imports.
ASSANIE: And that means fewer cattle are coming into the United States, which results in tighter supply and higher beef prices.
WONG: That's bad news for consumers, but not a bad situation for the people who raise cattle. We know this is a nationwide issue, so we called up a rancher out on the range a little north of Texas.
SMITH: Wyoming, to be precise - to a guy with a honest-to-goodness cowboy hat and a beefy name.
JACK BERGER: Hello. My name's Jack Berger. I'm a rancher from Saratoga, Wyoming.
WONG: Jack explained to us that, yes, the drought and the screwworm parasite have reduced cattle supply and sent up cattle prices. But there is another factor, something he calls the cattle cycle.
BERGER: I mean, a few years ago, cattle prices weren't very good, and that causes some people to kind of leave the business. And then those of us that stay in the business, there's fewer of us and fewer cattle out there on the market, and so that drives prices up.
SMITH: Naturally, we had to ask about tariffs. High tariffs might mean even more pressure on prices. But Jack sees the beneficial side of the tariff war. Australia, for instance, used to restrict the import of U.S. beef. Under pressure from President Trump, Australia has relented.
BERGER: I hear they just didn't want ours 'cause it's so much higher quality. They didn't want their people to know how good beef could be and stuff, but...
SMITH: (Laughter).
BERGER: But they are taking some of our beef now, which is only fair.
SMITH: That's probably just a story told by cattle ranchers in the U.S.
BERGER: (Laughter) Well, I don't think there's any country that can claim the quality that we have in the United States.
SMITH: Always be selling. Always be selling the beef.
WONG: Wailin Wong.
SMITH: Robert Smith, NPR News. Transcript provided by NPR, Copyright NPR.
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