The cost of ignoring the cattle sector: US beef prices reach record highs

The price of ground beef averaged $6.12 per pound in June, marking a year-over-year increase of nearly 12%, according to the Department of Agriculture's index. Likewise, grill cuts such as ribeye or sirloin rose more than 8%, topping $11.49 per pound.

This rise is not something that happened overnight. For more than two decades, the price of meat has been rising steadily, but the underlying problem is even more worrisome: the country is losing its capacity to produce meat on a large scale.

Decline in meat production

At the start of 2025, the U.S. had 86.7 million head of cattle, the lowest figure since 1951, according to the latest USDA report. The drop is partly explained by the prolonged drought in the West, which reduced available pasture space and made inputs more expensive. However, there are also the policies that were implemented in recent decades:

- Drought and water management: Among the main reasons for the increase are major droughts. Due to these climatic conditions, between 2021 and 2024, the land suitable for this work decreased, and the costs of livestock feed increased. This situation led many producers to reduce their herds.

Federal water management policies, such as restrictions on irrigation in drought-affected areas, exacerbated the situation. In October 2024, 62% of cattle were in drought-affected regions, driving the total head of cattle in the U.S. down to 86.7 million in 2025.

- Ethanol mandates: The implementation of the Renewable Fuels Standard (initiated in 2005 and expanded in 2007) incentivized the use of corn to produce ethanol, reducing the amount of corn available to feed livestock. This drove up livestock feed costs, putting pressure on profit margins and causing herd reductions.

- Response to COVID-19 (2020): During the pandemic, workplace safety regulations forced the temporary closure of meat processing plants, which reduced processing capacity. This created a supply bottleneck, resulting in higher retail prices. Meat prices in general rose 6.9% in 2020, and beef prices increased by 8.9%.

- High interest rates: The rise in interest rates since 2022 has made financing to expand cattle herds more difficult.

Added to this was another new threat: the reappearance of the screwworm (New World screwworm fly) in Mexico, a parasite that devours living tissue and has already caused the suspension of cattle imports from the United States' southern neighbor.

Trump bets on domestic product

Donald Trump's White House seems determined to push forward measures to shield food sovereignty. These include tariffs of up to 50% on Brazilian beef, which represents a significant portion of the lean imports used to blend with local meat.

Much of the business relies on lean cuts from abroad to produce burgers and ground beef tailored to domestic consumer tastes. On that point, Trump has been blunt: "America first," even if that means the price goes up in the short term.

Possible industry demands

Weather conditions are known to have improved, and corn prices are down, which could make cattle feed cheaper. However, recovery in the cattle sector remains slow. Raising a cow takes several years, and replenishing a herd requires a significant investment that many young farmers cannot afford. According to American Farm Bureau estimates, forming a minimum herd costs more than $100,000, excluding land and infrastructure (AP News).

Despite this scenario, and although ranchers have not submitted formal requests for assistance, some voices within the sector are calling for measures to facilitate industry expansion, such as greater access to affordable feed and financial incentives to keep calves as future breeders rather than sending them to slaughter. However, high production costs, the rising price of credit and unstable weather conditions continue to hamper these efforts.