Fast food chains warn of price hikes due to beef

Major fast food chains in the U.S. are warning customers about possible price increases due to rising beef costs. McDonald's, Texas Roadhouse, and Shake Shack are among the restaurants that could be affected. In January, prices for beef and veal rose by 5.5% compared to the previous year. This rise in beef prices is happening even faster than economic inflation in the U.S. As a result, popular items at these restaurants may become more expensive. Estimates suggest that a Big Mac could cost around $6, while a double cheeseburger from Shake Shack might exceed $10. Additionally, a sirloin steak at Texas Roadhouse could top $15. Several factors are leading to these price hikes. The U.S. cattle population has reached a historic low due to drought conditions and weather changes. Beef supply chains are also facing delays, as cattle take longer to grow to market weight compared to other meat sources. Furthermore, beef imports from Mexico are currently banned because of a pest outbreak, prompting stricter inspections. While experts predict the U.S. beef herd will grow by 2027, restaurants are feeling the pressure from rising costs. Katie Fogerty, CFO of Shake Shack, noted that beef makes up a significant portion of their food costs. As a result, they are worried about further increases in beef prices due to the declining cattle population. Some experts also warn that as prices for eggs go up, customers might turn to beef as a substitute. This shift in demand could impact pricing further across the restaurant industry.