Why beef prices have been climbing

Summary

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.

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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.

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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.

Transcript

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[Sabri Benishore]

The president says he probably won't fire the head of the Federal Reserve. From Marketplace, I'm Sabri Benishore in for David Brancaccio. There's a mixed message this morning from President Trump on whether he would fire Federal Reserve Chair Jerome Powell. A report that Trump would dismiss Powell spooked markets yesterday. Marketplace's Nancy Marshall Genser has the latest.

[Nancy Marshall Genser]

Stocks and the value of the dollar tumbled briefly yesterday. Investors were reacting to a Bloomberg report that President Trump would fire Fed Chair Powell soon. They recovered after Trump was asked by a reporter if he was ruling out the idea of dismissing Powell and said.

[Donald Trump]

This 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.

[Nancy Marshall Genser]

Trump was referring to the renovation of two Fed buildings in Washington. The Fed has acknowledged cost overruns, citing extra expenses for the removal of asbestos and contaminated soil and complications from a higher than expected water table. Some Fed watchers say the Trump administration is using the renovation project to build a case for firing Powell. The law is vague on whether the president can do this, only saying top Fed officials can be fired for cause. I'm Nancy Marshall Genser for Marketplace.

[Sabri Benishore]

Consumer spending is the foundation of this economy, which is why we look at how much people spent at the store each month. Retail sales, they jumped 0.6% in June. That's a big change from the month before, when consumers held back and spent less. Here to decode that for us is Diane Swonk, chief economist at the audit, tax and advisory firm kpmg. Hi Diane Good morning. So can you translate this for us? Retail sales? They fell in May, they popped up in June. What's going on?

[Diane Swonk]

We saw a couple of things happen. One is there was a bit of a relief from the fact that many of the most prohibitive tariffs have been postponed and that gave consumers a little more confidence and you know, lift to their step and they went out and clearly spent more. We also saw the composition of retail sales go more towards high end households. We saw that in vehicle sales where truck sales are still just going on at a very strong pace. What we also are seeing is some of the imprint of the increased prices on mostly big ticket durable goods outside of vehicles, things like appliances, furniture, electronics all went up and spending in those categories also went up, but was likely amplified by the increase in inflation in those goods.

[Sabri Benishore]

Do we have any sense of whether there is more tariff inflation in the pipeline? Not even counting all the new tariffs we're getting.

[Diane Swonk]

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.

[Sabri Benishore]

Diane Swank, Chief economist at kpmg. Thank you so much.

[Diane Swonk]

Thank you.

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[Sabri Benishore]

Go to wix.com as you fire up the grill this summer, your mind may turn to beef prices. They are at an all time high $6.12 a pound in June according to the latest Federal Reserve data. Ground beef prices are up 45% in the last 10 years. That is faster than inflation. This means people and businesses have had to get creative. The BBC's Monica Miller filed this report for us.

[Monica Miller]

Uncle Jack's Steakhouse in New York is a known quantity in certain circles. There are framed pictures at the entrance of famous patrons like billionaire Michael Bloomberg and a framed autograph of social media influencer Kim Kardashian with lipstick Kiss. The owner calls it his wall of fame.

[Donald Trump]

William Deagle Uncle Jack's owner entrepreneur, aka the steak doctor.

[Monica Miller]

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.

[Donald Trump]

I evolved my menu, right, evolved the 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.

[Monica Miller]

The latest figures show the average pound of ground beef in May was close to $6, a 16% increase compared to last year. One reason why beef prices are so high is the US has the lowest cow inventory in over 70 years. The business wasn't profitable, according to Michael Swanson, agricultural economist for Wells Fargo.

[Michael Swanson]

They mean when you don't make money, you stop doing what you do or you do less of it. Simple as that.

[Monica Miller]

High living expenses, droughts, and an increase in grain prices are some reasons that have discouraged farmers from raising more cattle or have gone out of business altogether. The US Sells high end cuts like steak to the international market, but it primarily buys what's considered hamburger meat or what's sometimes called grind from abroad. Right now, the US Imports more beef than it exports.

[Michael Swanson]

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.

[Monica Miller]

Swanson says tariffs will have an impact on prices, but despite the sticker shock at the checkout, Americans are the world's largest consumers of beef. Cattle farming could see a resurgence in.

[Michael Swanson]

The US but high prices usually bring more production. There's a lot more nice pickup trucks on the road today in cattle country.

[Monica Miller]

Roughly 85% of the industry is run by a few large companies, and the job outlook for cattle farmers is declining.

[Sabri Benishore]

That was Monica Miller with the BBC in New York. I'm Sabri Benishore with the Marketplace Morning.

[Monica Miller]

Report.

[Sabri Benishore]

From APM American Public Media.

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Marketplace listeners know that voice.

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I'm Kai Rysdal from Marketplace. Let's do the numbers.

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