The State of the U.S. Beef Market: Why Prices Are Rising and Supplies Are Tight

We are thrilled to welcome Jonathan Sachs as our new Beef Product Specialist. With a passion for quality cuts, deep knowledge of supply chains and sustainable practices, and years of experience in food science and product development, Jonathan brings the expertise that elevates every step from pasture to plate. In his blog, he’ll be sharing insights on everything from breed selection and butchery techniques to flavor pairings and recently emerging trends in the beef industry.

As we approach late August 2025, the U.S. beef market is going through one of its most turbulent periods in decades. Cattle inventories are at multi-decade lows, prices are rising rapidly, and both domestic and international supply chains are strained by drought, feed inflation, disease outbreaks, and changing trade dynamics. From ranchers to retailers, every part of the chain is adjusting to scarcity and increasing costs.

Shrinking Herds: A Structural Challenge

According to the USDA’s July 2025 Cattle Inventory Report, the U.S. herd size has fallen to just 94.2 million head, one of the lowest levels in nearly fifty years. The number of cattle on feed as of June stood at 11.44 million, down 1% from last year (USDA Cattle on Feed Report).

These reduced numbers are driven by:

• Drought has devastated forage across much of the High Plains and interior West.
• Elevated feed costs, make herd rebuilding uneconomical.
• Industry exits, as many smaller ranchers have chosen to leave the business rather than continue at thin margins.

Packers Under Pressure

Fewer cattle also mean packers are fighting shrinking margins. Many facilities have cut operating hours or slowed line speeds. Industry observers note that older plants are most at risk, as newer facilities with automation and higher throughput are better positioned to survive. This shift suggests an era of greater consolidation, where larger processors dominate and smaller, custom plants struggle to compete.

The Lingering Impact of Drought and Feed Costs

Even with some regions receiving better rainfall this year, the shadow of drought remains. Producers who liquidated herds during dry years now face steep restocking costs. Add to that persistently high corn, soybean, and hay prices, and rebuilding the national herd will take years of favorable conditions.

Screwworm Outbreak Tightens Imports

Complicating domestic supply challenges is a screwworm outbreak in Mexico, which led USDA Secretary Brooke Rollins to suspend live animal imports through southern border ports in May 2025 (Washington Post, USDA Press Release). While the ban applies only to live cattle, it has cut off a significant source of feeder and slaughter animals.

To combat the outbreak, USDA is investing in a $750 million sterile fly factory in Texas capable of producing 300 million sterile screwworm flies per week, part of an eradication campaign (Associated Press). The facility underscores the seriousness of the threat and the government’s long-term commitment to keeping the pest from spreading northward.

Sticker Shock at the Meat Counter

For consumers, the reality shows up most clearly in grocery bills. The average retail price of ground beef reached $6.12 per pound in June 2025, according to WRTV. The Federal Reserve Bank of St. Louis shows that price rising further to $6.25 per pound in July (FRED data).

Inflation metrics highlight the strain: ground beef prices are up 10.3% year-over-year, while steak prices have jumped 12.4% (AllRecipes). Families are feeling the squeeze whether they’re buying premium cuts or everyday hamburger.

Imports Surge—but at a Cost

With domestic production falling short, the U.S. has turned to imports. May 2025 imports hit 550 million pounds, up more than 60% year-over-year, according to Meatingplace.

The USDA projects total beef imports for 2025 at 5.27 billion pounds, a 13.8% increase from 2024 (S&P Global). Yet that growth is unlikely to continue indefinitely: the agency forecasts a 6.1% decline in imports in 2026, reflecting trade policy uncertainties and global supply competition.

Brazil remains America’s top beef supplier, but tariffs on Brazilian beef have opened the door for countries like Australia, Paraguay, Uruguay, and Argentina to expand their roles (U.S. Import Data). Still, none can match Brazil’s scale, leaving the U.S. market vulnerable.

A Market in Transition

Together, these forces are reshaping the beef industry:

• Consolidation in packing plants is accelerating, driven by efficiency and scale.
• Ranchers are forced to choose between rebuilding herds slowly or staying lean to avoid risk.
• Retailers are adjusting assortments, pricing strategies, and promotions in response to tighter supply and higher wholesale costs.

Consumers are adapting too—shifting to pork, poultry, or even plant-based proteins, buying in bulk, or moving toward frozen alternatives to manage household budgets.

Looking Ahead

Near Term (6–12 months)

• Prices are likely to remain elevated.
• Imports will continue filling some gaps, though tariffs and disease outbreaks could disrupt flows.
• Herd rebuilding will remain limited by high feed costs.

Medium to Long Term (1–5 years)

• Herd recovery will be gradual; even optimistic projections suggest multiple years of rebuilding.
• Modernization in processing will continue, likely reducing smaller plant capacity.
• Imports will remain a critical balancing tool, though global competition will keep costs high.

Key variables shaping the future include weather patterns, feed grain markets, trade policy, and disease management both domestically and abroad.

Who Feels the Impact?

• Ranchers: balancing restocking costs against financial risks.
• Packers: adapting to fewer cattle and consolidating around efficiency.
• Retailers: navigating consumer backlash to higher prices while securing supply.
• Consumers: facing limited options and higher prices, pushing many toward alternatives.

The U.S. beef industry in 2025 is defined by scarcity, rising costs, and structural change. A historically small cattle herd, drought’s lingering impacts, feed price inflation, trade barriers, and livestock disease threats are converging to reshape the market.

While imports offer partial relief, they cannot offset the full shortfall. Processing is consolidating, ranchers face tough choices, and consumers are paying more than ever for beef staples. Looking ahead, the path to stability will depend on favorable weather, stronger economics, and strategic adaptation across the supply chain.

For now, the beef market is in transition—and the uncertainty is likely to persist well into the future.

Jonathan Sachs, Beef Product Specialist