Marketplace Morning Report – July 17, 2025 Episode: Why Beef Prices Have Been Climbing

In today’s episode of the Marketplace Morning Report, host Sabri Benishore delves into several pressing economic issues, with a particular focus on the recent surge in beef prices. The episode is structured into three main segments: the tension between President Donald Trump and Federal Reserve Chair Jerome Powell, a deep dive into consumer spending and retail sales, and an extensive analysis of the factors driving up beef prices in the United States. Below is a detailed summary capturing the key discussions, insights, and conclusions from each segment.

1. Federal Reserve Leadership Under Scrutiny

Timestamp: 01:01 – 02:25

The episode opens with a discussion about the rumored tension between President Trump and Federal Reserve Chair Jerome Powell. Sabri Benishore reports that recent market volatility was sparked by Bloomberg’s report suggesting that President Trump might dismiss Powell. Nancy Marshall Genser provides further insights:

• Market Reaction: "Stocks and the value of the dollar tumbled briefly yesterday," (01:22) indicating investor anxiety over potential policy shifts.

President Trump's response to these rumors was both dismissive and speculative. When questioned by a reporter, he stated:

“I don't rule out anything, but I think it's highly unlikely unless he has to leave. Fraud. I mean, it's possible there's fraud involved with the 2.5, $2.7 billion renovation.” (01:38)

Trump referred to a costly renovation project of two Federal Reserve buildings, hinting at possible misconduct as a basis for Powell’s removal. Nancy Marshall Genser elaborates that the Federal Reserve has acknowledged cost overruns due to unforeseen expenses like asbestos removal and soil contamination. This situation raises questions about the President’s authority to dismiss top Fed officials without clear cause, emphasizing the ambiguity in the law regarding such actions.

2. Retail Sales and Consumer Spending Dynamics

Timestamp: 02:25 – 04:00

Transitioning from federal economic policies, the discussion shifts to consumer spending, a cornerstone of the current U.S. economy. Sabri Benishore introduces Diane Swonk, Chief Economist at KPMG, to unpack recent retail sales data:

• June Retail Sales Surge: "Retail sales, they jumped 0.6% in June. That's a big change from the month before, when consumers held back and spent less." (02:25)

Diane Swonk explains the factors behind this uptick:

• Tariff Relief: "There was a bit of a relief from the fact that many of the most prohibitive tariffs have been postponed," (02:53) which boosted consumer confidence and spending.
• High-End Spending: Increased purchases in high-ticket items like vehicles indicate a shift towards higher-end segments.
• Inflation Impact: Rising prices in durable goods such as appliances, furniture, and electronics contributed to higher spending, albeit alongside inflationary pressures.

When questioned about future inflation, Swonk warns:

“The bulk of the inflation that are due to tariffs is really still ahead of us. Inflation still picked up in June and will likely accelerate further in the month of July.” (03:46)

This suggests that while current retail sales data appears positive, underlying inflationary trends may pose challenges ahead.

3. The Surge in Beef Prices

Timestamp: 05:02 – 08:07

The heart of the episode centers on the alarming rise in beef prices, which have reached an all-time high of $6.12 per pound in June, marking a 45% increase over the past decade—outpacing general inflation rates. Sabri Benishore introduces a report by Monica Miller from the BBC to explore the underlying causes and implications of this trend.

Monica Miller reports from Uncle Jack's Steakhouse in New York, highlighting the real-world impact of soaring beef prices:

“A porterhouse steak for two was listed on the menu at an eye-watering $165. But these days, an increase in beef prices has Mr. Deagle offering new menu items that most customers can afford.” (05:47)

William Deagle, owner of Uncle Jack's, explains how his business is adapting:

“I evolved my menu to have more burger cuts, more steak sandwich cuts. So right now we have an Uncle Jack's steak sandwich. I've always had it, but now I have a French dip. So the steak sandwich is grilled filet mignon and then the French dip is roasted prime, you know, rib shaved super thin because a lot of people can't afford the steak, so they're choosing down to still get the meat experience.” (06:05)

Michael Swanson, an agricultural economist with Wells Fargo, provides an analysis of the factors driving beef prices:

“They mean when you don't make money, you stop doing what you do or you do less of it. Simple as that.” (06:52)

Key Factors Influencing Beef Prices:

• Low Cattle Inventory: The U.S. currently has the lowest cow inventory in over 70 years, making beef production less profitable.
• Rising Production Costs: High living expenses, droughts, and increased grain prices have deterred farmers from expanding cattle herds or have led to farm closures.
• Imports vs. Exports: While the U.S. exports high-end beef cuts like steaks, it imports more ground beef, primarily from countries like Australia and Brazil, where low-cost, grass-fed cattle are abundant.

“We go to the supplemental market, about 20% or 15%, depending how you want to calculate it. On the grind side, Australia, Brazil, places like that. Why? Because they have large cattle herds that are out on the grass walking around. Not really to our taste for steaks, but certainly make a good hamburger.” (07:21)

Market Implications:

• Tariffs: While tariffs impact prices, Swanson notes that Americans remain the largest consumers of beef globally, suggesting potential for domestic production growth in response to high prices.

“High prices usually bring more production. There's a lot more nice pickup trucks on the road today in cattle country.” (07:51)

However, the industry faces challenges:

• Consolidation: Approximately 85% of the beef industry is controlled by a few large companies.
• Job Outlook: The number of cattle farming jobs is declining, raising concerns about the sustainability of beef production growth.

Conclusion: The episode underscores the complex interplay between federal economic policies, consumer behavior, and global market forces in shaping the current economic landscape. The significant rise in beef prices serves as a case study of how supply chain disruptions, production costs, and international trade dynamics can profoundly impact everyday consumers and businesses alike.

Final Thoughts: As beef prices continue to climb, both consumers and businesses must navigate these changes, adapting their strategies and consumption patterns. The potential for increased domestic beef production offers a glimmer of hope, but industry consolidation and economic pressures pose significant hurdles.

For those interested in the full discussion, tuning into the Marketplace Morning Report provides valuable insights into the evolving economic trends affecting daily life and business operations.