Rising Beef Prices: Why the Herd Is Shrinking and Costs Are Soaring

The price of beef has jumped faster than most other grocery items, climbing 15 % over the past year. Ground beef is hitting record highs, while chicken and milk prices stay flat or barely rise. Farmers blame a shrinking cattle population. The U. S. herd is the smallest it has been since the 1950s, mainly because drought and higher production costs—especially interest rates—make raising cattle expensive. Instead of keeping animals to grow the herd, ranchers sell young cows for slaughter and pocket higher prices. A shortage that lasts longer than expected keeps beef pricey. Even if the U. S. were to grow its herd, it would not reach stores until 2028, so consumers will feel the impact for years. Ranchers like Brandi Buzzard in Kansas are making money now, but they also face rising costs for equipment and land. Oklahoma rancher Kacie Scherler says the business is “extremely fragile” because operating expenses have surged. The U. S. has stopped importing live cattle from Mexico after the return of a deadly parasite, the New World screwworm. While imports from South America may help, they mostly supply ground beef and won’t solve the shortage quickly.At the processing end, owners like Patrick Montgomery from KC Cattle Company are struggling. He sold many animals last year to improve genetics, but today those same calves can cost up to $1, 500—much higher than five years ago. He warns that the whole beef market is in disarray, with very few cattle left to feed consumers. Big packers such as Tyson Foods are also feeling the squeeze, reporting quarterly losses in 2024. The higher costs of borrowing add pressure to every link in the supply chain, ultimately pushing up prices for shoppers. Federal Reserve officials have kept interest rates steady but still worry that inflation remains above the 2 % target. Politically, rising food prices are a key issue for voters in the upcoming mid‑term elections. President Trump has promised to boost competition and increase Argentine beef imports, but the complex supply chain and long lead times make quick fixes unlikely. He has also ordered investigations into meatpackers, accusing foreign‑owned companies of price fixing and collusion. In summary, a combination of drought, high costs, supply chain challenges, and political pressures is driving beef prices higher. The shortage of cattle will likely keep the market tight for several years, leaving consumers to pay more at the grocery store.