I was contemplating a hamburger cookout over the Labor Day holiday. Prospects?
Figure 1: PPI Wholesaling of Fresh Meat, Seafood, Dairy, and Fruits and Vegetables (blue), PPI Frozen Ground Meat Patties and Other Processed, Frozen, or Cooked Meats, Made from Purchased Carcasses (tan), all seasonally adjusted by author using geometric moving average, all in logs 2025M01=0. Source: BLS via FRED, author’s calculations.
For fresh vegetable and fruits, tariffs are now in place for Mexican goods, and we have anecdotal evidence on difficulty in obtaining labor in the fields, so the jump in PPI for fresh fruit and vegetables, meat and seafood is not surprising. For processed meat, smaller herds are part of the issue, but tariffs on Brazilian imports have added — Brazilian beef accounts for about a quarter of US beef imports.
That’s at the wholesale level. What about at the impact at the retail level? There’s nothing exactly corresponding to fresh meats…, but I can check PPI processed meats and CPI for hamburger.
Figure 2: PPI Frozen Ground Meat Patties and Other Processed, Frozen, or Cooked Meats, Made from Purchased Carcasses (tan), seasonally adjusted by author using geometric moving average, and CPI for hamburger, (light blue), both in logs 2025M01=0. Source: BLS via FRED, author’s calculations.
Over the 2000M01-2025M07 period, the Granger causality test rejects the null at the 1% msl that PPI for this category does not cause the CPI for hamburger. The reverse causality relation fails to reject at the 50% level.
So…expect higher prices for hamburger… and lettuce and tomatoes and…
Thanks, Trump!
Just a reminder – Brucie Hall recently told us that screwworms are in the U.S. beef herd and are what’s driving up the cost of beef. In fact, the U.S. herd is so far free of screwworm. Brucie also told us that the presences (sic) of screwworms in U.S. herds is the result of beef imports, implying that imports are bad. What is actually happening is that screwworms are migrating northward in Mexico and are now within 400 miles of the U.S. border. Nothing to do with trade.
All of the facts were available in the source Brucie linked to, but Brucie lied about them anyway. Sloppy and dishonest.
Mostly, the U.S. imports hamburger meat and raises higher-priced cuts domestically. We do produce hamburger domestically, but import almost no steak. Tariffs raise the price of hamburger relative to other cuts. So does screwworm, which is endemic from Mexico southward in the Americas – not new. Drought and flood increase the cost of feeding cattle, thus reducing herd size and raising the cost of beef in general. The same is true for pork, lamb, poultry, beefalo, buffalo, goat… The higher the feed cost per pound of meat in the grocery, the more upward pressure on the price of that meat due to climate change. Beef is feed-intensive.
I should also note that it’s up to U.S. cattle breeders and government at the national and state level to keep the U.S. herd free of screwworm, should the worms migrate to the border. U.S. cattle have to be segregated to be kept from infection. That could mean fencing and large geographic offsets – expensive stuff. Monitoring and quarantining, too. Coordination and cooperation are vital, which is where government comes in.
Sure hope government takes it’s job seriously.
Credit where credit is due:
https://www.usda.gov/about-usda/news/press-releases/2025/08/15/usda-announces-sweeping-plans-protect-united-states-new-world-screwworm
USDA is on the job. The plan is to screw screwworms into oblivion. I’m no expert, but this approach has worked on other pests.
On other pests? Literally the very same technique was used on screwworms back in the 1950s and 1960s. There’s nothing new here, radiated sterile males. It worked and screw worms were completely extinct in the US for the last 60 years or so. Everything old is new again for you youngsters.
You can see for yourself in an exciting film from the Department of Energy, 1960. An evil enemy! Lab coated scientists! Atomic energy! Gamma rays! Radiated flies!
They don’t make them like this anymore. Sure beats TikTok.
https://www.youtube.com/watch?v=QFoOnS6CWSI