America’s smallest herd in decades is in part driving up beef prices

America’s farmers are facing the smallest cattle herds in 70 years.

Years of drought, rising costs and an aging farm workforce have caused herds to decline across the country. Farmers and agricultural economists say rebuilding will take years and beef prices It doesn’t seem likely to ease any time soon.

“The biggest problem was drought,” said Eric Belasco, chair of the agricultural economics department at Montana State University.

Beef prices are near record highs, but Americans aren’t holding back

He said years of dry weather had destroyed grasslands in the West and Plains, leaving farmers without enough feed and water to feed their herds. Many were forced to sell their cattle early; even the cows needed to produce a new generation of calves, making reconstruction difficult.

“This is not going to be a quick fix, you’re not going to fix it overnight,” Belasco told Fox News Digital.

The effects of the years-long drought are still being felt, and consumers will continue to pay the price until farmers rebuild their herds, Belasco said.

“The main reason you’re seeing prices so high is because we haven’t seen any inventory restructuring,” he said. “Until we see the restructuring, you probably won’t see prices come down again.”

This slow rebuilding poses a challenge for the cattle industry, according to Derrell Peel, professor of agricultural economics at Oklahoma State University.

“The reality is there’s nothing anyone can do to change this very quickly,” Peel said. “We are facing a tight supply situation that takes a few years to develop, and it will take a few years to recover from it.”

Peel, who specializes in livestock marketing, said there is no quick way to ease the pressure on beef prices because it takes about two years to bring animals to market and several years to rebuild herds.

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Even as farmers wait for herds to recover, dry conditions are working against them, turning pastures into dust and nutrition into a luxury.

The Kansas City Federal Reserve’s study found that with each step in drought severity, cattle-producing regions experienced an approximately 12% decrease in hay production, a 5% increase in hay prices, a 1% decrease in herd size and a 4% decrease in farm income.

To cope with this situation, many farmers are reducing the size of their herds. A 2022 Farm Bureau survey found that nearly two in three farmers have sold their livestock and have roughly one-third fewer cattle than before.

Ranchers and agricultural economists say it will take years to rebuild the cattle inventory. (Ricky Carioti/Washington Post/Getty Images)

Few people see the challenges of farming more clearly than Cole Bolton, owner of K&C Cattle Company, whose pastures dot the gentle edges of the Texas Hill Country.

“I think it’s going to take some time to fix this crisis we’re in with the cattle shortage,” Bolton told Fox News Digital. “My message to consumers is simple, folks, be patient. We’ve got to rebuild our herds.” he said.

The area, known for its red soil and family-run farms, has been without rain for almost three months, Bolton said. As downpours finally approach, he noted that the cattle industry has weathered a succession of adversities over the past five years, from market turmoil to extreme conditions.

The growing tensions illustrate how persistent drought is reshaping the farming industry and shrinking the country’s livestock supply.

This pressure is felt not only on farms but also on farms. general store.

The average retail price of beef rose from about $8.51 per pound in August 2024 to $9.85 per pound a year later, an increase of nearly 16%, according to USDA data.

The “5-market calf price” represents how much farmers earn for live cattle before they are turned into meat. The “farm to retail” breakdown reflects everything that happens next; costs and profits associated with slaughtering, processing, packaging, shipping, and selling beef in stores.

Much of this business, and the profits it brings, is concentrated among the industry’s “big four” meatpackers: Tyson Foods, JBS, Cargill and National Beef.

Together, these data points show that farmers are making slightly more money for their cattle than they were a few years ago, but the biggest price increases occur after the animals leave the pasture.

Despite the price increases between the farm and the grocery store, there was no fluctuation in demand. Americans are still buying more beef than ever before.

Americans are still buying beef even as prices climb to nearly $10 per pound. (Jim Watson/AFP/Getty Images)

Beef remains the dominant player in the fresh meat aisle, with a 12% increase in sales last year at $44.3 billion, outpacing chicken, pork and turkey, according to National Beef Association contractor Beef Research.

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Glynn Tonsor, professor of agricultural economics at Kansas State University, told Fox News Digital that strong consumer demand will continue to grow beef prices higher.

“There’s nothing that forces me, you, or anyone else to pay more for beef when we go to the grocery store. That’s what people choose,” he said. “Consumer demand for beef is strong and regardless of the situation on the supply side, this has the effect of pushing prices up.”