US Beef Prices Hit Record Highs Amid Supply Challenges

Beef prices in the United States reached historic levels in 2025, driven by a combination of reduced cattle herds, drought conditions, import restrictions, and tariffs, according to data from the US Department of Agriculture (USDA) and industry experts.

The average retail price of ground beef hit US$13.5/kg in June, a nearly 12% increase from the same month in 2024. Uncooked beef cuts rose to US$25.3/kg, marking a record high for the national meat sector. Price variations also show regional differences, with ground beef averaging US$33.5/kg in western cities compared to US$27.07/kg in southern regions, according to the Federal Reserve Economic Data (FRED). These price increases coincide with peak summer consumption.

The USDA reported that the US cattle herd shrank to 86.7 million head in January 2025, the lowest level since 1951, representing an 8% decline from the 2019 peak. Prolonged droughts across key livestock regions, including Texas, Oklahoma, and New Mexico, have depleted pastures and raised feed costs, forcing many producers to send more breeding cows to slaughter. This immediate response maintained short-term supply but reduced future herd growth. Experts at Kansas State University and Texas A&M explain that cattle reproduction cycles require at least two years before herd expansion materializes.

“Beef is much more complex than eggs. The cattle industry remains the Wild West of the protein market, whereas the egg market is more corporatized with supply-demand management,” said Michael Swanson, Chief Agricultural Economist, Wells Fargo. 

Structural and situational factors combine to limit supply. The suspension of cattle imports from Mexico, historically providing around 4% of US slaughter cattle, especially lean meat for ground beef. since May 2025 due to detection of the screwworm parasite has tightened availability further. At the same time, the US government imposed a 50% tariff on Brazilian beef starting August 2025, restricting imports of lean beef from a major supplier. Australia and New Zealand, subject to lower tariffs, cannot fully offset the shortfall.

Domestic demand remains strong despite record prices. The USDA estimates that beef and veal prices will increase an average of 6.8% throughout 2025, with projected growth between 2.6% and 11.5%. Consumer preferences have not shifted significantly toward alternative proteins such as pork or chicken, even amid rising costs.

On the other hand, retailers are adopting new strategies to stabilize supply and prices. Walmart, for example, opened its own beef processing plant in Olathe, Kansas, allowing direct supplier relationships and eliminating intermediaries. “This milestone ensures greater consistency, transparency, and value for our customers,” stated John Laney, Executive Vice President of Food, Walmart. 

Bernt Nelson, economist at the American Farm Bureau Federation (AFBF), highlighted that even with record prices, profit margins for producers remain tight due to high input costs. Among these costs, feed expenses have soared because drought-stricken pastures have forced reliance on more expensive cattle feed.

Imports of beef from countries like Argentina, Australia, and Brazil currently account for about 8% of US beef consumption, while beef exports have declined 22% year-over-year as of May 2025, according to the AFBF.

Price relief is unlikely in the near term. The USDA and university experts agree that persistent supply constraints and high input costs will keep prices elevated through 2025 and beyond. Although grain prices have improved and pastures are partially recovering, rebuilding herds is a slow process. Producers who opt to retain breeding females to expand herds must plan for at least two years before seeing market effects.

The combination of record prices, herd reductions, import limitations, and tariffs is creating a challenging environment for US beef producers, retailers, and consumers alike as the country faces the highest beef prices in more than seven decades.