Egg and beef prices are both on the rise, putting pressure on consumers and businesses alike. Recent reports show beef prices, in particular, have increased significantly, with challenges noted by company executives during earnings calls.

In January, beef and veal prices rose by 5.5%, outpacing the 1.9% increase in the overall food-at-home category, as reported by the Labor Department’s Consumer Price Index. According to Courtney Schmidt, Sector Manager at Wells Fargo Agri-Food Institute, the rise in beef prices is largely due to reduced U.S. beef production, combined with steady consumer demand.

U.S. Cattle Herd Decline Affects Beef Prices
The U.S. cattle herd is currently experiencing a downturn, with cattle inventories expected to hit historically low levels in 2025. As of January 1, 2025, the U.S. cattle and calf inventory had decreased by about 1% from the previous year, according to Bernt Nelson, an economist with the American Farm Bureau Foundation. This drop highlights the ongoing decline of U.S. cattle herds and puts further pressure on beef prices.

Nelson also noted that prices for fed steers—cattle ready for slaughter—have recently reached record highs, which is good for sellers but presents challenges for buyers. These high prices could prevent farmers from expanding their herds. “Calf prices are also strong, presenting an opportunity for cow-calf producers,” said Nelson. “If these calves are sold for breeding or retained, it will reduce the number of cattle available in the beef market, further tightening supplies.”

Uncertain Future for Cattle Industry
While prices are currently high, the cattle industry faces uncertainty. Farmers may be forced to sell more female cattle for beef instead of retaining them for breeding. This could lead to a further decline in the cattle population and drive prices even higher in the future.

Impact on Retailers and Fast Food Chains
Major retailers and fast food chains are closely monitoring beef prices, which have affected their projections for the 2025 fiscal year. Walmart’s CFO, John David Rainey, mentioned that food prices are “slightly inflationary” due to items like eggs, bacon, and other meats. Wendy’s CEO Kirk Tanner also noted that beef prices are a significant driver of inflation, affecting their cost structure. “We expect beef to be the largest contributor to this price increase,” Tanner stated.

Similarly, Shake Shack CFO Katie Fogertey predicted that beef prices would lead to moderate inflation in the coming year, with costs increasing in the mid-to-high single digits.

A Silver Lining for Chicken and Pork
There is some good news, however. The rise in beef prices has benefited the chicken and pork industries, which are now seeing a rebound. According to Schmidt, “Improved consumer demand and supply corrections have led to price increases for chicken and pork,” offering a positive outlook for these sectors.

As egg and beef prices continue to climb, industries and consumers alike will feel the effects, but the rebound of chicken and pork offers some relief.