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

America’s ranchers are facing their smallest herd of cattle in 70 years.

Years of severe drought, rising costs and an aging livestock workforce have reduced the size of herds across the country. Ranchers and agricultural economists alike say rebuilding will take years Beef prices It is unlikely to ease any time soon.

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

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Years of dry weather have wiped out grasslands across the West and Plains, leaving ranchers without enough feed or water to support their herds, he said. Many were forced to sell livestock early, even cows needed to produce the next generation of calves, making rebuilding difficult.

“It’s not going to be a quick fix, and you’re not going to solve it overnight,” Belasco told Fox News Digital.

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

“The main reason prices are up is because we haven’t seen any kind of rebuilding of inventory,” he said. “Until we rebuild, you probably won’t see prices go down again.”

The slow rebuilding process poses a challenge for the livestock industry, according to Derrell Bell, a professor of agricultural economics at Oklahoma State University.

“The fact of the matter is there’s nothing anyone can do to change this very quickly,” Bell said. “We are in a supply constraint that has been several years in development, and will take several years to get out of.”

Bell, a cattle marketing specialist, said there was no quick way to ease the pressure on beef prices, as it takes about two years to bring animals to market and several years to rebuild herds.

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Even as ranchers wait for their herds to recover, dry conditions are working against them, turning pastures into dust and feed into luxury.

Research by the Kansas City Federal Reserve found that with each increase in drought severity, livestock-producing areas see a 12% decline in hay production, a 5% rise in hay prices, a 1% decline in herd size, and a 4% decline in farm income.

To cope with the situation, many ranchers are reducing their herds. A 2022 Farm Bureau survey found that about two in three ranchers sold their animals, leaving them with about a third fewer cattle than before.

Few people see the challenges of ranching more clearly than Cole Bolton, owner of K&C Cattle Company, whose pastures run along the soft edge of the Texas Hill Country.

“I think it’s going to take some time to resolve this crisis that we’re facing with cattle shortages,” Bolton told Fox News Digital. “My message to consumers is simple, people, be patient. We have to rebuild our herds.”

The area, known for its red dirt and family-run farms, has been without rain for about three months, Bolton said. As the rains finally fell, he noted that the livestock industry had weathered setback after setback, from market turmoil to extreme conditions, over the past five years.

This growing strain highlights how the ongoing drought is reshaping the livestock industry and shrinking the country’s livestock supply.

This pressure is being felt not only on farms, but around the world Grocery store.

According to USDA data, the average retail price of beef rose from about $8.51 per pound in August 2024 to $9.85 per pound the following year, an increase of about 16%.

The “market price of five cattle” represents what ranchers earn for live cattle before they are processed into meat. Farm-to-retail spread reflects everything that happens afterward — the costs and profits associated with slaughtering, processing, packing, shipping and selling the beef in stores.

Much of this business — and the profits it generates — is concentrated among the industry’s “Big Four” meatpackers: Tyson Foods, JBS, Cargill, and National Beef.

Together, these data points show that while ranchers are earning slightly more for their cattle than they were a few years ago, the largest increases in prices occur after the animals leave the pasture.

Despite the profit margins between the farm and the grocery store, demand has not diminished. Americans are still buying more beef than ever.

Beef remains the dominant player in the fresh meat aisle, with sales reaching $44.3 billion over the past year, a 12% increase that outpaced chicken, pork and turkey, according to Beef Research, a company contracted by the National Cattlemen’s Beef Association.

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Strong consumer demand will continue to grow, Glenn Tonsor, professor of agricultural economics at Kansas State University, told Fox News Digital. Beef prices higher.

“There’s nothing that forces me or you or anyone else when we go to the grocery store to pay more for beef. People make that choice,” he said. “Consumer desire for beef is strong, and regardless of the supply-side situation, that has the effect of pushing up prices.”