Beef prices soar due to supply issues and drought

In the United States, beef prices reached record highs in May 2025, hitting $5.98 per pound. This surge in prices is primarily attributed to supply and demand imbalances, where demand has outstripped the available supply of beef. The number of beef cattle has decreased significantly, dropping to 27.8 million, the lowest count since the 1960s. This decline is largely due to ranchers facing drought conditions that have persisted since 2021, leading to forced liquidation of cattle herds. Drought conditions have affected major beef-producing areas, compounding the already challenging situation in the cattle industry. With insufficient rainfall, ranchers have struggled to maintain their herds, forcing many to sell off their cattle prematurely. Furthermore, due to the biological growth rate of cattle, it takes significant time for herds to rebuild, which means that the market could remain tight for several years. While alternative protein sources like pork and poultry are available and more affordable, consumers are still facing high beef prices. The restaurant industry is feeling the pinch, as many establishments are compelled to raise prices on menu items heavily reliant on beef, such as burgers. The impact of economic conditions, alongside rising costs in the supply chain, continues to challenge consumers and businesses alike. Projections from the U.S. Department of Agriculture indicate that beef prices could reach new all-time highs in 2026, making it likely that prices will remain elevated for the foreseeable future. Experts expect the difficult supply situation to persist for another two to three years, if not longer. The ongoing drought and the gradual recovery of cattle herds will play critical roles in determining the future of beef pricing in the U.S.