The price of beef is on the rise across the country, and it doesn’t seem like prices will drop soon.
Since the start of the year, beef prices have surged by over 8%, currently averaging $9.26 per pound, according to the USDA.
Recent statistics from the US Bureau of Labor Statistics indicate that the average cost of ground beef, a household staple, reached $6.10 last month, up from $5.36 in June 2024.
Surprisingly, the tariffs set by President Trump on beef imports haven’t made a significant impact yet. Last year, the US imported over 4.1 billion pounds of beef, as per USDA data.
While New Zealand and Australia face a 10% tariff on their beef exports, Brazil is looking at potentially hefty tariffs—up to 50%—on meat exports this year.
Several underlying factors contribute to the rising beef prices. Drought, declining cattle herds, high supply expenses, and issues such as parasites affecting imported livestock are all exacerbating the situation.
Cattle Stock Decline
Over the past two decades, beef prices have been climbing as the number of cattle in the US has decreased significantly in the last five years.
As of January 1, USDA reports indicated that there were 86.7 million cows and calves in the US. Out of this, approximately 37.2 million were cows and heifers that have calved this year.
January saw a slight decline, with the total number of cows down by 1% from last year, bringing it to 27.9 million, whereas dairy cow numbers have actually seen a rise to about 9.35 million.
Brady Stewart, Chief Supply Chain Officer at Tyson Foods, remarked in early May during a revenue call that the company was weathering “the most challenging market conditions we’ve ever encountered.” He noted that overall adjusted operating profits had increased by 27%, with all segments performing well, beef included.
Economist Bernd Nelson pointed out that a tight cattle supply, currently at a low of 74, is a major factor driving beef prices. He mentioned that the limited supply, along with the reliance on beef demand, creates narrow profit margins for farmers and ranchers. A drop in demand could lead to falling cattle prices, posing challenges for herd expansion.
Rising Costs for Farmers
Nelson emphasized that cattle farmers are facing “razor-thin margins” due to escalating supply costs.
“The demand is robust at the moment, but it could shift quickly,” he cautioned. “If consumer confidence dips, demand might follow suit, impacting cattle farmers’ profits negatively.”
Additionally, on the supply side, higher beef prices mean ranchers may be tempted to sell cattle. Economists from Texas A&M University, like David Anderson, suggest that ranchers are weighing whether to sell an animal now for a top dollar or hold on until it can produce offspring.
Parasites Impacting Imports from Mexico
Carnivorous screwworms also pose a threat to the beef market. These insects lay eggs in livestock, leading to devastating consequences as the larvae infest and often kill the host.
Earlier in July, the US halted cattle imports from Mexico after new cases of the New World screwworm were detected close to the border, according to USDA.
In June, USDA announced plans to reopen imports from Mexico, but efforts were paused following the screwworm detection, with further quarantine measures put in place.
The US has pledged to remain vigilant amid these challenges concerning livestock imports.
