Beef prices are soaring. Here’s why that’s hard to fix
Shoppers may be experiencing sticker shock due to the price of beef at the grocery store.
Prices in the beef and veal category increased by 14.7%, while overall food prices increased by 3.1% from September 2024 to September 2025. This is the last consumer price index data publicly available due to the government shutdown in October.
But spending by American farmers is also rising. Farmers’ input costs have increased by more than 50% in the past five years, according to the American Farm Bureau Federation.
“It’s hard for a beef producer to say that beef prices are too high. I mean, if people are paying $6 for a latte at Starbucks and then they’re paying $6 for a pound of beef, they could feed a family of three on that pound of beef,” said Taylon Lienemann, co-owner of Linetics Ranch in Princeton, Nebrax.
The main reason for the increase in beef prices is due to record low cattle supply. The start of 2025 saw the smallest national herd since 1951.
The cattle cycle is the natural expansion and contraction of the U.S. cattle herd that is driven by supply and demand. It usually occurs every eight to 12 years.
When producers can obtain higher prices for their cattle, they will likely keep more females, called heifers, for breeding. When cattle supplies increase, prices eventually fall and herds shrink again.
“That’s the big question for our producers right now. You know, they have to make a 50/50 decision. Do we sell these cattle into the supply system or do we hold them back? And I think when money is on the table, especially when the demand from the consumer is this high, there’s an incentive to go ahead and sell them to the food supply system,” said Adam Wegner, marketing manager for the Nebraska Cattle Council.
Severe drought can also affect a farmer’s decision to keep his cattle for breeding purposes.
“In case of drought, you produce a minimum amount of forage and/or hay or alfalfa,” Lienemann said. “The number of cattle out there is still there and they still need that feed.”
During times of drought, farmers often supplement grass feed with grain. Grain prices have fallen significantly since 2022, but this could still be an unexpected cost for producers.
“What we’re having right now is kind of a mix of drought, high demand and low heifer retention, which is kind of offsetting the herd size issue we’re having in America today,” said Nate Rempe, CEO of Omaha Steaks. “We have to build the pack, period.”
The direct-to-consumer meat company said it hasn’t raised prices in more than three years but is now feeling the pinch.
“The cost of beef has gone up so much that it’s really starting to impact our bottom line,” Rempe said. “We’re always looking within ourselves. How can we find efficiencies? How can we invest in our business to get more volume at less cost? But there are some tipping points, right? There’s a point where the raw material we need is at a price point, and we’re going to have to start transferring some of that.”
Despite smaller herd numbers, beef production has increased overall as the U.S. produces larger cattle. The increased supply, especially of ground meat, is also due to beef imports. has been increasing steadily over the last decade.
It is now a rapidly developing Tariff situation in Brazil And Parasitic cattle infections in Mexico further increases prices for consumers. Still, experts say the native herd is most critical to long-term relief.
“In the short term, if we start keeping heifers to put into the breeding herd, that’s actually going to reduce total domestic beef production because we have fewer animals going to the feedlot. So that’s actually going to support prices a lot more in the short term. But over that three-year period that we’re talking about, we’ll start to see increased production coming into the system and that will start to increase as well.” [soften] Beef prices and cattle prices are the same, said Andrew Griffith, a professor of agricultural and resource economics at the University of Tennessee.
Watch the video for an exclusive look at Omaha Steaks’ processing facilities and learn more about how hyperinflation is affecting the beef industry.
