Why High Beef Prices Are Here to Stay

By Patrick Thomas

EAGLE MOUNTAIN, Utah—Tyson Foods TSN 0.70%increase; up pointing triangle maintenance worker Austin Campbell was checking his email in August for updates on a promotion when instead he saw a message from the company’s chief executive.

“Our beef business is operating in a challenging environment due to the historic cattle shortage,” Donnie King, Tyson’s CEO at the time, wrote in an internal email announcing the closure of the Utah facility where Campbell worked. “These supply constraints are likely to persist.”

The $300 million Utah plant was only five years old. It doesn’t slaughter cattle but was filled with state-of-the-art automation to help employees cut and package beef cuts into steaks, roasts and ground beef for grocery stores.



The closure was part of sweeping changes to Tyson’s business, including scrapping another slaughter facility in Illinois and plans to sell a plant in Washington. It had already shut down a massive slaughterhouse in Nebraska earlier in the year. Rival JBS also closed a slaughter plant in Pennsylvania. Cargill shut a ground beef packaging facility in Wisconsin.

America’s $100 billion beef industry is undergoing a painful downsizing, and it’s poised to make high meat prices a long-term reality.

After years of economic turmoil and droughts, the U.S. cattle herd has shrunk to its smallest level in 75 years. The supply shock is driving up steak and hamburger prices at grocery stores and restaurants to record highs—conditions that could last well into the next decade, given how long it takes to replenish a herd.

“The common public probably thinks you can turn it around in four months,” said Brad Peek, whose family has run one of the largest livestock auctions west of the Rockies for decades. “We’ll be lucky to start gaining cattle in four years.”

The shortage is costing meatpackers billions of dollars in losses because the packers can’t fully pass on their higher costs to supermarkets and restaurants. That means more closures, a vicious cycle that leaves the meat industry less prepared for the day when cattle herds eventually expand.



Beef prices have become the poster child for food inflation and a Trump administration obsession. Everyone is divided on how to fix it. All sides worry that record-high prices for rib-eye and meatloaf will drive consumers away and sap demand.

Interviews with ranchers, meatpackers and policymakers reveal a fractured supply chain with few good answers.

Ranchers—once the big winners in the shrinking livestock market—now fear cheap imported beef will undercut their product, and that fewer processing plants will reduce competition and hurt the value of their cattle. The uncertainty is preventing them from rebuilding their herds, prolonging a shortage that could permanently raise beef prices and put the future of the U.S. rancher in doubt.

The rancher

Tom Donati, a fourth-generation rancher in California’s Sacramento Valley, runs an annual cattle auction where hundreds of ranchers gather to look at breeding bulls.

Bulls are the cornerstone of a rancher’s herd. With cattle in short supply, bull prices are soaring to record levels. Hundreds of ranchers travel to auctions across the country to find the right bull.

On a blistering September morning, ranchers arrive and scout cattle for the perfect fit. They are served lunches of “Tri-Tip” roasts—a triangular cut of beef popular in California—along with an open bar.

This year, the average price of a bull at Donati’s sale was $13,601, the highest it’s ever been, up from $10,482 last year and $7,874 in 2024.

Donati says he is concerned prices are too high. It feels like a bubble that will eventually pop if cattle prices decline, meatpacking capacity falls too low or consumer demand wanes. When that happens, ranchers who took on debt to buy expensive bulls will be in trouble, Donati says, adding, “I hope things don’t get out of hand.”

The gaudy prices at Donati’s bull sale are common across the country. It began in 2020, when the Covid-19 pandemic forced meatpackers to temporarily shut plants as tens of thousands of employees who worked shoulder-to-shoulder fell sick. Daily capacity at U.S. cattle and hog facilities temporarily declined as much as 45%, according to the USDA. Meatpackers struggled for the next year to recruit enough workers to run their plants full-tilt.

With less processing capacity, cattle prices plummeted. Ranchers had to hold cattle longer, hoping their value would rise, but doing so added to their costs. Ranchers took on more debt to stay in business. While the industry leveled out in 2022 after the pandemic and plant staffing rebounded, ranchers’ costs worsened. Rampant inflation pushed up prices for fuel, feed and equipment.

A massive drought stung cattle country in 2022, drying up grazing pastures from Montana to Oklahoma.

Greg Williams, a fourth-generation rancher in northern California, sold off hundreds of his cows during that time. His pastures didn’t have enough hay. “We just were really short on feed and really thin in the pocketbook,” he said. “We just had to take our lump on that one.”

Lines at the sale barns swelled across the U.S. as ranchers rushed to sell their cattle to reduce the number of mouths they had to feed. By January of this year, the herd had shrunk to its lowest level in seven decades. But in an era of high prices, ranchers who were able to hang on are enjoying their highest profits in years, according to industry analysts. Ranchers are estimated to be making about $1,000 profit per head of cattle this year, while meatpackers are losing about $100 per animal.

Higher prices can motivate ranchers to begin rebuilding their herds. But it’s a slow process: It takes roughly 18 to 22 months to grow beef cattle to market weight. Chickens are ready to be slaughtered in six weeks, and hogs, in about six months.



“We still have a long way to go before we have any increase in numbers and we’re going to get tighter before we get better,” said Derrell Peel, a professor of agricultural economics at Oklahoma State University. “The high prices are ahead of us yet.”

The meatpacker

Eagle Mountain is a frontier city at the base of several mountain ranges, an hour southwest of Salt Lake City. Open land and the original pony express trail separate newly constructed neighborhoods. A group of investors founded the town just 30 years ago after buying the land at a bankruptcy auction.

The area has since exploded in population, doubling since the pandemic to about 80,000 people, but the town is mostly housing. City officials say the Tyson Foods plant, built in 2021, brought hundreds of daytime workers to what had been a quiet bedroom community. The plant created local demand that attracted gas stations, fast-food outlets and grocery stores down the road. It also brought new employees to the city, including Campbell.

The plant employed more than 700 people and accounted for about 15% of the jobs in Eagle Mountain.

Now it’s empty.

“I was shocked,” said Eagle Mountain Mayor Jared Gray. “There’ve been plants that have been open for 50 years across the country, so why would they not close those and keep something that’s a little more current?”

Tyson did offer Campbell a job at a different facility after laying him off. He declined because he said he wanted a role with more stability. He recently found a new job for a company building data centers in the region. “I don’t think I would ever return to the industry,” he said.

Meatpackers say they are fighting to make money wherever they can to avoid closing more facilities. When a slaughter plant closes, it hardly ever reopens, leaving the total processing capacity in the U.S. permanently lowered for years to come, analysts say. Building new plants is complicated and costly. They require specialized wastewater treatment, environmental permitting and a large labor force. A handful of new plants have been built in recent years, but they are smaller.

Tyson and JBS’s U.S. beef businesses are expected to lose more than $1 billion combined this year. Tyson’s beef business is on track to lose money for four straight years. And it is shrinking fast. Last year, the company could slaughter about 28,000 cattle a day, roughly a quarter of all killed in the U.S. After closures and the planned sale of a Washington facility, it will be down to about 18,000 a day. Four companies process about 85% of America’s beef: Tyson, Cargill, JBS and National Beef.

“It is so difficult to get that capacity back once it closes,” said Don Close, a senior beef industry analyst with Terrain, an agriculture market research firm. “Further contraction is one of the biggest long-term threats the industry has.”

Meanwhile, meatpackers are trying to squeeze out all the value they can. In Schuyler, Neb., Cargill plant managers and supervisors train workers on the processing line to scrape every ounce of valuable meat off the bone to boost their finances. Supervisors perform daily audits using tablets to measure how much meat they are yielding. Real-time performance boards are posted across the plant floor so teams know their targets.

Getting more meat off cattle carcasses is “the greatest lever we can pull right now,” said Jarrod Gillig, who leads Cargill’s North America beef business.

Cargill is also working more closely with its cattle suppliers, the feedlot.

About 200 miles from Schuyler, Jason Anderson and his family have been running a feedlot in Arapahoe, Neb., for almost 100 years. Several truckloads of his roughly 18-month-old cattle will soon be shipped to Schuyler for slaughter.

Anderson exclusively sells his cattle to Cargill, shipping about 450,000 cattle annually from the 31 feedlots he owns. It gives him certainty about his income, and Cargill sends him reams of data on his cattle’s quality and suggests changes to make their carcasses tastier for consumers and more valuable to him.

But as beef prices keep rising, he’s concerned about losing consumers and that foreign companies will keep trying to import more beef into the U.S., undercutting cattlemen like him.

“We have this bull’s-eye now,” Anderson said. “The price is so high that anywhere globally in the world, they want to send their meat into this.”

Brazilian imports

Trump administration officials have been searching for ways to lower beef prices. It’s tried funding smaller meatpackers to boost competition, probing meat companies for price-fixing with the Justice Department, and even calling grocery executives before the Fourth of July to ask about their beef prices.

One solution that the Trump administration has zeroed in on is imports.

The U.S. has long imported only small amounts of beef from countries such as Brazil and Australia. Those regions feed their cattle on grass for longer periods before slaughter, making the meat leaner and less flavorful than grain-fed American beef. But blended, it’s perfect for creating an 80/20 lean-to-fat ratio of ground beef ideal for hamburgers.

Imports have drifted between 10% and 15% of the overall U.S. beef supply over the past decade, rising with the demand for fast-food burgers. The USDA now estimates imports rising to a record 20% of U.S. beef supplies this year.

In late August, Brazilian billionaire Joesley Batista, who shares control of JBS, the world’s largest meatpacker, met with Trump in the Oval Office to discuss how additional beef from Brazil could lower U.S. beef prices, the Journal reported. To do that, though, Trump would have to drop a 26% import tax.

The next day, Trump announced on social media a plan to temporarily allow 300,000 metric tons of beef imports into the U.S., which the president said would be sold at a 25% discount to market prices. So far, there is little sign that the imports have lowered prices. The American Farm Bureau Federation, the largest farmer trade group, said Trump’s plan has done little to lower prices across the U.S. so far, except for a few cents at some grocery stores.

‘Devastating’

BJ Weber, a sixth-generation farmer and feedlot owner, sold about 90% of his cattle for years to Tyson’s now-closed Illinois beef plant, 7 miles away. Weber says the price cattlemen are paid by meatpackers has dropped roughly $300 per head since the plant closed. He’s trucking cattle longer distances to smaller meat plants in Michigan, Missouri and Iowa.

“You don’t know how good it was until it was gone,” he said. About 75% to 80% of the cattle that populated Weber’s feedyard came from ranchers in the American Southeast.

Craig Hammond is one of them. Hammond, who has about 800 cows in Glade Spring, Va., says the loss of Tyson’s plant and JBS’s Pennsylvania plant is a huge blow to the region.

“They’re not going to pay nearly as much for our cattle,” he said.

Trucking costs are also going up. Cattle in his region must be trucked longer distances, reducing available truck supply and raising rates. If ranchers like Hammond don’t feel confident they will make money, they’re unlikely to build up their herds, prolonging the cattle shortage and the industry’s woes.

“It’s devastating,” Hammond said.

https://www.wsj.com/business/high-b...Be&reflink=desktopwebshare_permalink

Beef professionals say that through turmoil and drought,beef production has reached a 75 year low that can take a decade to recover.YET,,,Trump was supposed to lower beef costs the day after election.Lot of people in this country have turned STOOOOOOPID.

Around here I can't remember any crop ground that has been converted to pasture/hay in 30+ years. However there is a lot of pasture/hay/CRP ground that has been put into crop production. Row crop farming: plant for a few months in the spring, hire someone to spray, harvest for a few months in the fall, crop insurance and government price supports help out, quite a bit easier than cattle.

Its a bad business model to sell to a very few large buyers who dictate to you what your going to be paid.
Much smarter to sell direct to consumers and you dictate to them the price.

I don't think any President is able to easily affect the price of any one commodity with the exception of oil. All that can be hoped for is a president with a sound understanding of economics and a desire to lower, or at least not increase, inflation.

I'm no cowboy but I am not seeing that here. Maybe in the west hammered by drought for several years. Can't build or even maintain herds without grass. Those guys been selling. Trying to hang onto some breeding stock. Lately they are getting rain. I am hoping the drought is over. IMO pasture being turned into suburbs is a big problem. We have lost a LOT in the last ten years. Quite a few acres here have been bought just for deer hunting. That article is misleading IMO.

Calf and cattle prices here have dropped a lot the last month. I've been seeing calves sell for under $100.00 a head again. Back in 2012, I could get nearly unlimited dairy calves for free to $35.00 a head. I paid $45.00 for the last calf I bought in around 2014, which was a longhorn cross.

Keith

Bottle calves were $1000 - 1500 this spring. Milk replacer is $2 a pound. It does not pencil out. Is Tyson owned by China?

Tyson is publicly traded and $1,000 bottle calves absolutely penciled out... just don't include labor

This is from November 3rd sale locally. There's only 3 ways to get cheap beef, import it, grow it in a lab or crash the economy. It's to expensive to produce.

I wonder what the cost would be to haul 60 calves from Ohio to Minnesota, or out West, where they are worth up to nine times as much?

What would legally and medically need done?

Before expenses, except the cost of the calves, I would guess revenue would be over $20,000 a full load

Keith

Be wiser to feed them there til weaning then ship a semi load @$5 a mile. Can you buy big groups or just a couple here and there?

No. 20% of the shares are owned by the Tyson family partnership. The 5 next biggest shareholders, accounting for ~30% of the shares, are all U.S. based investment companies.

The Argentina stunt a few months ago absolutely affected prices. I sold some that week and got to witness it.

I have to completely disagree with you on this one. It’s actually very easy for the President to affect commodity prices. It’s happened over and over again. All it takes is one “tweet” or post on X and commodity prices have made rapid swings almost immediately as a result. It’s insane, but it’s true

Rather than complain about the price of beef one could always stop buying it. Plenty of other proteins available and cheaper.

True, but nothin compares to the flavor of nice juicy beef. Just my opinion.

Exactly. It's becoming a luxury, that is the cost of having 330 million people to feed from a limited land base while also subsidizing corn and soy

^^^and feeding lazy humans for free

Numbers will continue to decline. Ranchers are older by age on average than before, as mentioned here, pasture and hay ground is becoming cropland, etc etc etc. There are many reasons why the cattle herd will likely continue to shrink.

That said, we still buy beef. We like beef steaks and in the grand scheme of life the expense of some steaks or whatever is a a drop in the bucket. People whine about the price of a steak and pay a monthly cell phone bill, Netflix bill, Amazon prime bill and so on. Beef is Tasty, it is worth every cent.