According to Bloomberg, cattle futures hit an all-time high this week and beef prices are likely to continue rising as production slumps. U.S. beef output is forecast to decline 5.7% in 2014, according to the U.S. Dept. of Agriculture (USDA). Ranchers have struggled to recover from 2012’s drought, the worst since the 1930s and almost half of Texas—the biggest cattle-producing state—is still in drought.
Higher prices will raise costs for retailers and consumers may pay as much as 3.5% more for beef in 2014. Cattle prices are rising while most agricultural commodities are falling. Global food prices dropped 4.4% in the 12 months through November 2013, while meat climbed 0.3%.