Record High Beef Costs Result from Low Supplies

Beef prices are good for producers, but consumers are waiting for some relief. U.S. ground beef retail prices have broken their record highs two months in a row, and consumers may be waiting a while for relief.

The U.S. Department of Agriculture’s Economic Research Service reported an average ground beef price in July 2025 of $6.25 a pound. The previous record of $6.12 a pound was set in the previous month - the first time the average had ever broken $6.

Retail values are also escalating in other beef cuts, including choice beef at $9.69 a pound, all-fresh beef at $8.90, USDA Choice boneless round roast at $7.91 and USDA Choice sirloin steak at $13.55 in July. Prices for each of those categories increased from June.

Mississippi State University Extension beef specialist Brandi Karisch said reasons for the soaring prices are overlapping and numerous. At about 810,000 head, including 430,000 cows and heifers that have calved, the state’s cattle-and-calf inventory is still solid and remained unchanged between 2024-25. Keeping herds well fed has been more difficult to achieve.

“High beef prices are mainly driven by reduced national cattle inventories, which are at their lowest in decades due to drought-related herd reductions,” said Karisch, also a research professor in the MSU Department of Animal and Dairy Sciences. “Strong consumer demand and increased processing and transportation costs are also contributing.”

Consumers can also chalk up the higher costs to a lack of rainfall - not this year, but in recent ones. The effects of dry conditions in consecutive years extend well beyond their onset.

“While weather has been favorable with ample rainfall thus far this year, many producers sold out during the severe droughts we faced a few years ago and have not built back their herds,” Karisch said. “Record high prices have many cattle producers who are getting older choosing this year to exit the cattle business.”

Input costs for feed, forage and health of the animals are also elevated. According to Karisch, producers are dealing with high production costs, weather conditions varying from too dry or too wet, and heat stress on cattle. He said they’re adapting by tightening management practices and prioritizing herd health.

MSU Extension agricultural economist Josh Maples said while beef prices will likely remain high into 2026, historical patterns point to a climb in cattle production soon, which will eventually lead to prices leveling off.

“The number of calves born in the U.S. has been declining for the past seven years, and we are likely near the cyclical low point in cattle production. The next cycle begins when inventories start growing again,” Maples said. “Cattle cycles typically last about 10-12 years, and we are in year 12 of this one. We will likely begin to expand inventory over the next few years, but it will take a year or two after that for beef supplies to increase.”

Beef marketing

In the meantime, cattle producers, including a growing number of whom market beef shares and select cuts directly to consumers who prefer locally sourced beef, are profiting amid low supplies.

“It is a great time to have beef cattle,” Maples said. “One of the key challenges for cattle producers right now is deciding whether to expand by keeping more cows and heifers or to sell now at the high prices.”

EDITOR’S TAKE:

The story may seem redundant, but food prices are constantly being monitored by economists, bankers, and government, as well as others in the industry. One item that consistently stands out is the price of beef. It shows up in the form of higher prices at the restaurant and the grocery store. And, it seems the low herd levels are not going to change anytime soon. Not the best news for consumers.

The good news is that beef producers are doing extremely well overall. If you don’t have them on your preferred customer list, do so now. They are a prime target for truck sales in 2025 and into 2026. Be sure your inventory on AgTruckTrader.com® is current. And because the Big Beautiful Bill passed by Congress earlier this year restored 100% depreciation in the year of purchase, you should definitely show them the fantastic AGwagon!