Restaurant chains are increasingly worried about beef inflation, overshadowing concerns about egg prices. Shake Shack, for example, anticipates mid- to high-single-digit commodity inflation this year, primarily driven by rising beef costs. This concern stems from a shrinking U.S. beef herd, which is reportedly the smallest since 1961, influenced by factors like lower prices, drought, and higher costs for farmers.
The surge in beef costs is impacting various restaurants. Texas Roadhouse has raised its commodity inflation expectation to 3-4% due to a tighter cattle supply, and Portillo’s anticipates overall commodity inflation between 3-5%, with beef being the primary driver. Recent data indicates a significant jump, with the average cost of ground chuck in U.S. cities increasing by over 10% year-over-year in February and 4.5% between January and February of this year alone. The USDA forecasts a 3.2% increase in beef and veal prices this year.