Why U.S. Beef Prices Keep Scaling New Heights

U.S. beef cattle supplies have reached their lowest point since the Truman Administration, propelling beef prices to all-time highs that likely will persist in the months ahead.

Covid-19 pandemic disruptions, drought in the western U.S. and meatpacking industry consolidation all have played a role in declining cattle inventories in recent years.

Now, with supplies down, tariffs and Mother Nature may limit beef and cattle imports, maintaining upward pressure on prices. This week, the U.S. reinstituted a ban on cattle imports from Mexico because of concerns about screwworm, a flesh-eating larvae that can spread throughout cattle herds.

Prices Surge

Ground beef prices reached an average of $5.98 per pound in May, according to the Bureau of Labor Statistics. That’s a 16% increase from the same month a year ago and 46% higher than four years ago. A broader measure of retail beef prices, including steaks and roasts, from the U.S. Department of Agriculture shows a 17% increase since the beginning of 2023.

Beef prices that have repeatedly scaled new all-time highs this year directly reflect the declining availability of cattle for slaughter. As of Jan. 1, U.S. cattle inventories were at the lowest level since 1952. Inventories have declined steadily since the pandemic.

As consumer demand has remained steady, the lower supply has pushed up prices at cattle auctions and prices for cattle fattened at feed yards. Feeder cattle and live cattle prices have surged 21% and 14% so far this year, and average prices for slaughter steers have reached record highs.

Limited Production

As cattle prices have risen, meatpackers in May dropped the number of animals they slaughtered for the first time during that month since at least 1970. Typically, slaughter increases in spring months as meatpackers prepare for summer grilling season demand.

As a result, the USDA in June lowered its 2025 U.S. beef production projection slightly, and production in 2026 now is forecast to fall 4% from this year, likely keeping a high floor on prices.

Beef imports have helped pick up some of the supply slack this year, with U.S. beef imports up 28% through April. However, import prices have surged, exacerbated by tariffs the Trump Administration has levied on key foreign markets. That could limit import demand moving forward.