Read the latest issue of Dairy Market Drivers, a bi-weekly report from IDFA partner Ever.Ag. Dairy Market Drivers features spotlight data, key policy updates, and a one-minute video that covers timely topics for the dairy industry.
Dairy Market Drivers: Spotlight on Beef; Fuel Costs Driving Consumer Behavior; and CME Dairy Markets in a Minute!
Quick Bites: Fuel Costs Driving Consumer Behavior
- Drivers are more price conscious at the pump as tension in the Middle East early this year pushed gasoline prices higher. That sent consumers looking for cheap gas. And they increasingly found it at warehouse clubs, often combining fill-ups with grocery shopping to maximize savings.
- In fact, Costco reported record fuel volumes during every four-week period of its fiscal third quarter (mid-February through early May) as consumers gravitated toward lower-priced gas. The company also posted 9.4% U.S. same-store growth over the same period, supported in part by increased fuel traffic that brought more shoppers into its warehouses.
- High diesel prices also add to transportation costs. Trucking rates have climbed to their highest levels in four years, pushing retailers and manufacturers to rethink how goods move through their supply chains.
- These higher fuel costs are sending freight back to the rails. North American intermodal shipments climbed 6% year-over-year in May to an average of 369,000 containers and trailers per week – the largest annual increase since March 2025 – as companies looked for ways to reduce transportation costs.
- The savings between trucking and rail can be substantial. The average U.S. intermodal spot rate was $1.16 per mile for the week ending June 16, compared with $3.05 per mile for a comparable long-haul truckload. Logistics executives said the potential savings of 10% to 20% are prompting more companies to reconsider rail for less time-sensitive freight.
- Even if fuel prices continue to moderate, consumers and businesses have already adjusted their behavior. Whether that’s filling up where prices are lowest or choosing more economical shipping methods, those habits could outlast the latest spike in energy costs.
Today’s Special
- July is National Grilling Month, and Americans love to throw beef on the grill. A survey by Innerbody Research found burgers to be the most grilled food among U.S. consumers, while ribeye and filet mignon also made the top ten list.
- But Americans have been facing higher beef prices at the meat counter. Prices in May came down slightly from April, but a pound of ground beef was still $6.75, nearly 13% higher than a year ago. Steak was $12.80 per pound, up 16% year-over-year.
- Other meat sources are not following this same trajectory. While pork prices are slightly higher than they were a year ago, chicken cost less in May 2026 than it did last Spring.
- Strong demand combined with a historically small U.S. cattle herd are pushing prices upward. The nation’s beef cattle herd is at its smallest size since 1951 at 86.2 million head after tight margins and drought forced ranchers to sell cattle over the past few decades. Even if the U.S. cattle herd starts building now, it will take years to repopulate the herd.
- This has been an opportunity for dairy farmers. Dairy beef, in the form of steers and cull cows, has always contributed to the nation’s beef supply. However, the more recent practice of breeding dairy cattle to beef to produce valuable dairy x beef calves makes the dairy industry a more significant contributor of beef. And this beef income has been an important source of income for dairy farmers.
- And while high prices hadn’t been turning Americans away from beef, recent sales slipped slightly. Circana data showed May retail beef sales down 1.5% compared to May 2025, the first year-over-year decline since June 2024. It seems high gas prices combined with beef’s costly price tag may have taken a toll on consumers.
- Beef still seems to be winning the day. A growing number of consumers are ultra-focused on protein intake, but they don’t just want any protein. They are focusing on quality, taste and experience – all elements that beef can provide.