The average price of a pound of ground beef rose to $6.12 in June, up nearly 12% from a year ago
Beef prices in the U.S. have steadily risen over the past two decades, driven by a tightening supply of cattle even as consumer demand remains strong.
The U.S. cattle herd has been in long-term decline. As of January 1, the total number of cattle and calves stood at 86.7 million — an 8% drop from the most recent peak in 2019, and the smallest herd since 1951, according to data from the U.S. Department of Agriculture.
Multiple factors have contributed to this decline, including prolonged droughts, rising feed costs, and market dynamics. Now, a new threat — a persistent parasite outbreak in Mexico — coupled with the potential imposition of broad tariffs, threatens to further constrain supply and push prices even higher.
Shrinking Herd, Rising Prices
According to David Anderson, a livestock economist at Texas A&M, improvements in breeding have allowed ranchers to raise larger cattle, meaning beef production has remained relatively stable despite fewer animals. But those efficiencies haven’t been enough to offset other pressures.
Beginning in 2020, a multiyear drought hit large parts of the country, drying up grazing lands and driving up feed prices, as reported by the American Farm Bureau. The continued drought conditions across the West have squeezed ranchers already working on tight margins.
In response, many producers culled more female cattle than usual to reduce short-term costs. While this temporarily boosted beef supply, it came at the expense of future herd growth — setting the stage for tighter supply and elevated prices down the line.
Cattle prices have surged accordingly. Currently, animals are fetching more than $230 per hundredweight (100 pounds), with individual cows often selling for thousands of dollars.
Anderson notes that these high prices encourage ranchers to sell now rather than hold on to breeding stock — a short-term strategy that could further limit future supply if prices drop in coming years.