Tight supply, greater demand and rising fuel costs are propelling retail beef prices to near record highs in the United States, according to U.S. Department of Agriculture's Economic Research Service.

Retail prices for choice beef averaged $4.25 per pound in April, second only to the $4.32 per pound logged in November 2003, shortly after the United States barred imports of Canadian beef.

ERS expects June prices to drop to a range of $4.00 to $4.10 in June as supplies increase and the initial summer spike in grilling eases.

Average beef prices have climbed steadily in the past five years, from $2.87 per pound in 1999 to $4.06 per pound in 2004. Meanwhile, beef consumption has climbed some 25 percent since 1998—to 27.6 billion pounds last year.

More recent price hikes coincided with a reduction in U.S. herd sizes, the result of widespread drought and corresponding decreases in the grass cattle fed on. As of Jan. 1, the nation's cattle inventory measured 95.8 million head, as compared to a peak inventory of 103.5 million head in 1996.

With the drought easing, ranchers are expanding herds for the first time since 1999.