Shoppers may be feeling sticker shock with the cost of beef at the grocery store.
Prices in the beef and veal category are up 14.7%, while overall food is up 3.1% from September 2024 to September 2025 — the latest publicly available consumer price index data due to the government shutdown in October.
But expenses for America’s farmers are soaring too. Input costs for ranchers are up more than 50% over the past five years, according to the American Farm Bureau Federation.
“It’s hard as a beef producer to necessarily say that beef prices are too high. I mean, if people are paying $6 for a latte at Starbucks, but then they’re paying $6 for a pound of beef, they’re able to feed a family for a family of three with that pound of beef,” said Taylon Lienemann, co-owner of Linetics Ranch in Princeton, Nebraksa.
A major driver of the rising price of beef prices stems from a 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 — which is tied to supply and demand. It typically occurs every eight to 12 years.
When producers can get higher prices for their cattle, they will likely retain more females, called heifers, for breeding. When the cattle supply increases, prices eventually go down and the herds contract again.
“It’s the big question right now for our producers. You know, they have a 50/50 decision to make. Do we sell these cattle off into the supply system or do we hold them back? And I think when the money is on the table, there’s an incentive to go ahead and sell those to the food supply system, especially when demand is so high from the consumer,” said Adam Wegner, director of marketing for the Nebraska Beef Council.
Severe drought can also impact the decision for a rancher to retain cattle for breeding.
“When you’re in a drought, you’re producing minimal feed and or hay or alfalfa,” Lienemann said. “The amount of cattle that are out there are still out there, and they’re still needing that feed.”
During times of drought, ranchers will often supplement grass feed with grain. Grain prices have come down significantly since 2022, but it can still be an unexpected cost for producers.
“What we’re experiencing now is a sort of a mashup of drought, high demand and low heifer retention, sort of making up this herd size problem that we have today in America,” said Omaha Steaks CEO Nate Rempe. “We have got to build the herd, period.”
The direct-to-consumer meat company said it hasn’t raised prices in over three years but it’s now feeling the pinch.
“The cost of beef has increased so much that it’s really starting to hit our bottom line,” Rempe said. “We’re looking internally all the time. How can we find efficiencies? How can we invest in our business to drive more volume for less cost? But there is some breaking point, right? There is some point at which the raw material that we need is at a price point, that we’re going to have to start passing some of that on.”
Despite smaller herd numbers, beef production has increased overall because the U.S. is producing bigger cattle. Incremental supply, mainly for ground beef, also comes from beef imports, which have been increasing steadily over the past decade.
Now a rapidly evolving tariffs situation in Brazil and parasitic cattle infections in Mexico are further driving up prices for consumers. Still, experts say that the domestic herd is most critical for long term relief.
“In the short run, if we actually begin retaining heifers to put into the breeding herd, that actually is going to reduce total domestic beef production because we have fewer animals going to the feedlot. So that’s going to actually keep prices supported that much more in the short run. But within that three-year period that we’re talking about, we’ll start seeing that increased production feed into the system, which should start to [soften] beef prices and cattle prices alike,” said Andrew Griffith, an agricultural and resource economics professor at the University of Tennessee.
Watch the video to see an exclusive look at Omaha Steaks’ processing facilities and to learn more about how high inflation is affecting the beef industry.
