Beef prices are likely to continue rising as U.S. based cattle ranchers continue to shrink the size of their herds.

This move is expected to further constrain U.S. beef production in the coming months, the Wall Street Journal reported. Data from the federal government confirms that rising costs for feed and other expenses are encouraging ranchers to sell to sell calves into feedlots around the country at a faster rate which leaves fewer cattle available for slaughter. It is expected that this will become more pronounced later this year and into 2023.

Persistent drought conditions throughout the Western U.S. have decimated grazing pastures which causes cattle farmers to spend more money on supplemental feed which presents another major problem for the beef industry.

By 2023, beef production is expected to decline by 7% and cattle prices are expected to increase to record highs. These increased costs and shrinking supply pose serious problems for meatpackers like Tyson Foods Inc., JBS USA holdings Inc., Cargill Inc., and National Beef Packing Co.

It is likely that the increased cost of beef production is already being passed onto consumers. The more expensive it is to raise and maintain cows, and as fewer cows are raised for slaughter, the more expensive beef products will eventually cost. Ground beef and chicken prices have already reached all-time highs.