Drought has also pushed the price of cattle feed to dizzying heights, raising beef prices even higher. The feed crisis explains some of the woes of small ranchers. Many cattle spend their early months on a ranch eating grass, then are shipped to a feedlot where they are fattened with corn and other grains. If the feed costs more, the rancher earns less.

Over the past year and a half, surging demand slammed into this constrained supply. Throughout the coronavirus pandemic, the federal government has pumped enormous purchasing power into consumers’ wallets. This extra money—plus consumer cutbacks on other kinds of spending—has enabled consumers to increase their spending at the grocery store; they spent $84 billion more in 2020 relative to 2019.

If this supply-and-demand explanation is correct, then the right policy for government is: Do nothing. Higher prices will encourage ranchers to raise more cattle. Higher prices will enable meatpackers to pay higher wages. Higher prices will induce consumers to substitute other foods for beef. Supply and demand will equilibrate, as they always do. And this time, the high prices can serve another function, too: warning consumers of the pocketbook impact of drought-causing climate change.