Where's The Beef? America's Herd Shortage Sends Prices Soaring

US beef prices are surging—and consumers are only beginning to feel the effects. With cattle herd sizes now at their lowest levels since the 1950s, a crisis that has been building quietly across the western United States is starting to ripple through grocery shelves, restaurant menus, and export markets.

This downturn in the American cattle population is not the result of a sudden shock, but of several years of mounting pressure. Prolonged drought across the key ranching regions of Texas, Oklahoma, and the central plains has devastated grazing land, raised feed prices, and forced ranchers to shrink their herds to unsustainably low levels. The result is the tightest beef supply in modern memory—and little short-term relief in sight.

A Herd Thinned by Time and Climate

According to the U.S. Department of Agriculture (USDA), the national cattle inventory in early 2025 stands at just over 87 million head, a decline of nearly 7% from 2022 and the lowest figure since 1951. The drop is even more acute in breeding stock: the number of beef cows capable of calving is now 16% lower than a decade ago.

This dramatic contraction has been years in the making. Faced with repeated droughts and increasing input costs—particularly for hay, corn, and water—ranchers across the High Plains and Southwest began liquidating their herds as early as 2021. Many did so reluctantly, unable to afford the rising cost of feed or to rely on rain-starved pastures to support their livestock.

“The land just couldn’t sustain the numbers anymore,” said one cattle producer in western Kansas. “When you’re hauling water and buying hay in August, it’s not sustainable. You’re losing money every day.”

Drought’s Relentless Grip

Much of the central and western United States has experienced persistent drought conditions since 2020, with the latest multi-year stretch leaving vast tracts of pasture parched and unusable. States like Texas and Oklahoma, which together account for a significant portion of U.S. cattle production, have seen forage availability drop dramatically, prompting herd reductions across the board.

According to data from the National Oceanic and Atmospheric Administration (NOAA), the southern Plains have experienced below-average precipitation for 36 consecutive months. The consequences for calf production have been immediate: fewer breeding cows, fewer calves, and a delay in the restocking cycle.

With even irrigated pasture under pressure and no quick fix to restore soil moisture levels, the industry faces a prolonged recovery timeline. Experts suggest that even under ideal weather conditions, rebuilding the national herd will take several years, especially given how many older cows were culled in recent years.

Up the Chain: From Ranch to Retail

The ripple effects of the herd decline are now being felt throughout the beef supply chain.

At the feedlot level, there are simply fewer animals to process. This has forced meatpackers to pay higher prices for feeder cattle, and those costs are being passed along to retailers and, ultimately, consumers.

Wholesale beef prices have jumped sharply in the past six months. The USDA’s boxed beef cutout value—a benchmark for beef prices—rose by more than 14% year-on-year in April 2025. Grocery prices for ground beef, sirloin, and brisket have climbed accordingly, with average per-pound retail prices now at or near all-time highs.

Restaurants, too, are adjusting. Many are cutting beef portions, raising prices, or substituting with chicken and pork where possible. High-end steakhouses have seen double-digit increases in raw material costs, forcing menu changes and price hikes that have left diners—and owners—grappling with tough choices.

Futures Markets Reflect Tight Supply

The tight supply outlook is mirrored in the futures markets. Live cattle contracts on the Chicago Mercantile Exchange are trading near record highs, reflecting expectations that constrained supply will keep prices elevated into late 2025 and beyond.

Feeder cattle futures, which track the price of young animals entering feedlots, have also surged—up more than 20% from 2024 averages. Analysts warn that this is not a short-term phenomenon. Even with improved rainfall in the coming year, the biological lag in rebuilding a cow-calf operation means production capacity will remain limited well into 2026 or 2027.

“The pipeline is empty,” said one livestock economist. “Even if prices incentivise rebuilding now, you don’t get a full-grown steer ready for slaughter for two years. The shortage is baked in.”

The Policy and Industry Response

The USDA has rolled out a series of drought relief programs to support producers, including direct payments, subsidised feed transport, and emergency haying authorisations on federal lands. Yet many in the industry say this assistance is reactive rather than preventative, and that more structural reforms—such as improved water infrastructure and grazing management tools—are needed.

Meanwhile, some ranchers are investing in drought-resilient pasture systems or shifting to smaller, more sustainable herd sizes with premium beef offerings. But those measures take time and money—both in short supply after several lean years.

Consumer demand, too, may shift. With beef prices outpacing inflation, there’s a growing push toward alternatives, including poultry, plant-based meats, and lower-cost cuts. But despite the innovation in protein alternatives, beef remains deeply entrenched in the American diet—and for many, an irreplaceable staple.

Conclusion: No Quick Fix

The American beef industry faces a sobering reality. Years of climatic stress, financial pressure, and herd attrition have left the sector vulnerable to long-term disruption. With cattle numbers at a 70-year low and recovery likely to be slow and uneven, high beef prices are set to persist.

For ranchers, the priority is survival—weathering the dry years and hoping for a chance to rebuild. For consumers, it means adjusting expectations at the butcher’s counter. And for policymakers, it’s a warning: food security, even in a country as vast and resource-rich as the United States, can no longer be taken for granted.

Author: Gerardine Lucero