Ground beef prices reach record $5.98 per pound as cattle herds shrink
KANSAS CITY, Mo. (AP) — Ground beef prices soared to a record $5.98 per pound in May, marking a 16% increase from the previous year as the nation's cattle inventory dropped to its smallest level since 1951, according to federal data released this week.
The surge reflects a perfect storm of factors squeezing beef supply, including drought conditions across cattle-producing regions, rising feed costs and ranchers reducing herd sizes due to economic pressures.
U.S. Department of Agriculture figures show the national cattle inventory has reached its lowest point in more than seven decades, creating a supply shortage that industry experts say will likely keep prices elevated for the foreseeable future.
"We are continuing to be very small and again, smaller than we intended to be," said Derrell Peel, a livestock marketing specialist with Oklahoma State University Extension. "That's gonna lead to growing incentives for the industry to try to rebuild when we can, if Mother Nature lets us."
The cattle shortage stems from multiple challenges facing ranchers. Persistent drought throughout the Great Plains — where most U.S. cattle are raised — has driven up feed costs significantly. Combined with broader inflationary pressures affecting fuel, equipment and other ranch operating expenses, many producers have opted to reduce their herds.
Cortney Cowley, a senior economist at the Federal Reserve Bank of Kansas City, said producers face difficult decisions about whether to sell cattle at historically high prices or retain breeding stock for future production.
"It's really difficult to not sell right now at the historically high prices that ranchers are seeing," Cowley said.
The supply constraints have created a cascade effect throughout the beef industry. Meatpackers are paying premium prices for fewer cattle, squeezing their profit margins and ultimately passing higher costs to consumers.
The situation is compounded by America's role as a net beef importer. The U.S. consumes more beef than it produces, requiring imports to meet domestic demand — a factor that can drive prices higher when global supply is tight.
Trade policies add another layer of complexity. Industry analysts warn that tariffs on imported beef could push consumer prices even higher, though the full impact has yet to materialize.
Despite record-high prices, consumer demand for beef remains robust both domestically and internationally. Industry officials attribute the sustained demand to improved quality and beef's positioning as a premium protein choice.
However, economists caution that continued price increases could eventually dampen consumption if broader economic conditions deteriorate or unemployment rises significantly.
The cattle production cycle's inherent slowness means any recovery in supply will take years to develop. Even if ranchers begin rebuilding herds now, the process of breeding and raising cattle to market weight typically requires 18-24 months.
Bureau of Labor Statistics data shows the May ground beef price represents the latest milestone in a sustained upward trend that has outpaced general inflation rates. Beef prices have consistently climbed as cattle numbers declined from their most recent peak in 2019.
For consumers, the price surge means significant adjustments to grocery budgets. A typical family purchasing ground beef weekly now pays approximately $60 more annually than they did in May 2024, based on average consumption patterns.
Industry observers expect the current market dynamics to persist well into 2026, with any meaningful price relief dependent on weather conditions improving enough to support herd rebuilding efforts across major cattle-producing states.
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