Beef prices are soaring: Here’s why

Beef prices are soaring across the country and it is unlikely it will drop anytime soon.

Since of the start of the year, the price of beef increased over eight percent and is currently selling for $9.26 per pound, according to the U.S. Department of Agriculture (USDA). 

The U.S. Bureau of Labor Statistics shows that the average price of ground beef, a staple in American households, increased to $6.10 last month. In June 2024, the average price was $5.36.

Tariffs imposed by President Trump on a variety of countries have not had a huge impact on prices of beef yet. The U.S. imported over 4.1 billion pounds of beef last year, according to USDA data.

The countries that export a significant amount of meat, such as New Zealand and Australia, are facing a 10 percent tariff, while others, like Brazil, which has exported 216,119 metric tons of meat this year, might be staring at a 50 percent tariff.

Still, multiple other factors have contributed to the rise in beef prices, including drought conditions, a downward trend in the number of herds, high supply costs and a parasite impacting some imported cattle.

Cattle inventory drops  

Over the last two decades, the price of beef has increased as nationwide cattle inventory has slumped over the past five years.

As of Jan 1., there are 86.7 million heads of cattle and calves on U.S. farms, according to USDA’s data. Of the nearly 90 million, there were 37.2 million cows and heifers that calved, or gave birth, so far this year. 

There are 27.9 million beef cows in the U.S. as of Jan. 1, a one-percent drop from 2024. The number of milk cows has gradually gone up since last year, increasing to around 9.35 million.

Brady Stewart, the chief supply chain officer at Tyson Foods Inc., said during an earnings call in early May that beef is “experiencing the most challenging market conditions we’ve ever seen,” adding that the food company has “increased total adjusted operating income by 27 percent and every segment grew other than beef.” 

Cattle supply is at a 74-year low and tight supplies have helped jack up beef and cattle prices, according to economist Bernt Nelson. 

“With the supply side largely fixed, U.S. demand for beef is the lynchpin holding together razor thin profit margins for our nation’s cattle farmers and ranchers. If demand weakens, cattle prices will likely decline, creating a major obstacle to any meaningful expansion of the U.S. cattle herd,” Nelson wrote in a market intel report in late May. 

Costs rise for farmers

Nelson said that margins for cattle farmers and ranchers are also “razor thin” due to elevated supply costs. 

“Demand is currently strong, but this situation could quickly change,” the economist said. “Any decline in consumer confidence or household financial health could weaken demand, forcing  packers to lower bids and triggering financial losses for cattle farmers and ranchers.” 

Another factor impacting the prices of beef is the rising costs of cattle. With higher prices, ranchers and producers could be enticed to sell more cows according to a livestock economist at Texas A&M University David Anderson,

“For them, the balance is, ‘Do I sell that animal now and take this record high check?’ Or ‘do I keep her to realize her returns over her productive life when she’s having calves?. And so it’s this balancing act and so far the side that’s been winning is to sell her and get the check,” Anderson told The Associated Press this week. 

Parasite derails Mexican imports

A flesh-eating screwworm is also placing pressure on the struggling industry. Screwworms are flies whose females lay eggs in warm-blooded animals, normally livestock. Larvae hatch and then bite into the host animal until they end up killing it.

Earlier this month, the U.S. blocked the imports of Mexican cattle after the New World screwworm fly was noticed getting closer to the southern border. The new case was detected 370 miles south of southern border, according to USDA.

In June, the USDA resumed the imports of bison, cattle and equine from Mexico after another screwworm case. 

“The United States has promised to be vigilant — and after detecting this new NWS case, we are pausing the planned port reopening’s to further quarantine and target this deadly pest in Mexico. We must see additional progress combatting NWS in Veracruz and other nearby Mexican states in order to reopen livestock ports along the Southern border,” Secretary of Agriculture Brooke Rollins said in a statement on July 9. 

The Associated Press contributed to this report.