How Beef Got So Expensive

**Ryan Knutson** (0:07)
Omaha, Nebraska. Six o'clock dinner reservation. The Thomas family, party of six, is settling into one of the great old school steak houses in the Midwest.
It's the kind of place with low lighting and heavy chairs. The room smells like brown butter and seared beef fat.

**Patrick Thomas** (0:28)
It's old timey, it's kind of got the wooden exterior. The floors are creaking when you walk in.

**Ryan Knutson** (0:35)
That's our colleague, Patrick Thomas, as in the Thomas family, party of six.

**Patrick Thomas** (0:40)
You've kind of got that brassy Sinatra type of music, old world type of steakhouse.

**SPEAKER_4** (0:47)
I'm going to go from the most tender all the way up to our most heavily barbelled cut. So our most tender cut here will be the filet.

**Ryan Knutson** (0:55)
So what brought you to that steakhouse in Nebraska?

**Patrick Thomas** (0:57)
My family still lives out there. My brother was actually graduating high school.

**Ryan Knutson** (1:02)
Oh, wow, congratulations. Cheers.

**SPEAKER_6** (1:05)
Rye bread.

**Patrick Thomas** (1:05)
Ryan's graduation.

**Ryan Knutson** (1:07)
I heard his name is Ryan.

**Patrick Thomas** (1:09)
It's another Ryan.

**Ryan Knutson** (1:10)
What a great name.

**SPEAKER_6** (1:20)
How's your steak?

**SPEAKER_4** (1:21)
My steak's delicious, very tender and juicy.

**Ryan Knutson** (1:27)
But while the steak was delicious, the price was a lot harder to swallow.

**Patrick Thomas** (1:33)
You know, so a 11-ounce filet, $62, a bone-in ribeye, 25 ounces, that's going to be about $90.

**Ryan Knutson** (1:42)
That seems expensive for Nebraska.

**Patrick Thomas** (1:44)
And the tomahawk, that's $137.

**Ryan Knutson** (1:48)
Wow.
It's not just expensive for Nebraska. It's expensive everywhere. Beef prices are skyrocketing at restaurants, grocery stores, all over America. Welcome to the era of the $100 steak.

**Patrick Thomas** (2:03)
I went to the restaurant's Yelp page to find a picture of what the menu looked like 10 years ago. And it's about double from what it was 10 years ago.

**Ryan Knutson** (2:12)
Wow. Why is beef so expensive?

**Patrick Thomas** (2:18)
Beef is a very complex supply chain, but the answer is very simple. We don't have enough cattle in this country right now.

**Ryan Knutson** (2:28)
Welcome to The Journal, our show about money, business and power. I'm Ryan Knutson. It's Wednesday, June 10th.
Coming up on the show, where's the beef?

**SPEAKER_6** (3:00)
Oh boy, look at this bull, look at this bull, Randy. There is a ripping good, thick bull. At five, six, seven, eight, nine, ten.

**Ryan Knutson** (3:10)
The reason beef is so expensive right now has everything to do with the animals.

**Sean Lockery** (3:14)
Our colleague Patrick grew up in Nebraska, aka the beef state, and recently went to a cattle auction about four hours outside Omaha.

**Ryan Knutson** (3:27)
If you've never been to a bull sale before, there's one thing Patrick says you need to watch out for. Flying poop.

**Patrick Thomas** (3:35)
You have the bull running into the ring, who kind of trots out right away, he's kicking up some of the manure, and sometimes, you know, he runs by, and the manure will kind of fly up a little bit, so you gotta be careful if you're in the front row.

**Ryan Knutson** (3:45)
Yuck. Right now, the best cattle in America are worth a fortune.
Here at the TD Angus Bull Sale, ranchers pay astonishing amounts of money for breeding bulls, the fathers of future herds. Some will sell for as much as a new Cybertruck. On this spring day, all eyes in the room are on a hulking bull named The Man in Black. His breeders call him a quote, the man amongst boys.

**SPEAKER_6** (4:15)
He's the man in black.

**SPEAKER_5** (4:16)
Five, six, seven, eight, nine, ten.

**Ryan Knutson** (4:20)
In the end, he sold for $75,000. No bull.

**SPEAKER_6** (4:28)
Sold the bull, $75,000, $75,000.

**Ryan Knutson** (4:33)
The Man in Black is basically the start of the supply chain. He'll go on to father potentially dozens of calves each year, calves that will make up part of the nation's cattle herd. But the cattle herd in the US has dramatically shrunk. It's now at its smallest size in 75 years. There simply isn't enough cattle, and America wants beef.
The shortage is making the auctions really competitive.

**Patrick Thomas** (4:57)
You have guys been described as vicious because you'll have sometimes personal vendettas take place if they want to drive the price higher on somebody.

**Sean Lockery** (5:05)
Sometimes it gets pretty bloody in there. I mean, the knives come out from all different directions.

**Ryan Knutson** (5:12)
That's Sean Lockery, one of the ranchers who tried to win The Man in Black. Sean is a sixth-generation Great Plains cattleman. Sun-brown skin, broad shoulders, cowboy hat.