Small US cattle herd is one reason beef prices are so high

Key Points:

• The U.S. cattle herd is at its smallest in over 75 years, with 86 million head in 2024, contributing to high beef prices, as demand continues to outpace supply despite record beef production.
• Drought and poor pasture conditions affect about 63% of the cattle herd, increasing feed costs and limiting ranchers' ability to expand herds, with some forced to haul hay and water from other regions.
• Meat processors, dominated by four companies, are often blamed for high beef prices, but industry groups argue that retailers set consumer prices and that consolidation has not significantly increased in 30 years.
• The U.S.-Mexico border closure to livestock imports due to the New World screwworm parasite has reduced cattle supply by about 1 million head, further tightening the market and impacting southern plains ranchers.
• While established ranchers with land and equipment are benefiting from higher prices, newcomers face high costs and labor challenges, making it a difficult time to enter the cattle business.