The source of high cattle and beef prices

ZISK
6 hours ago
1 min read

High cattle and beef prices are suddenly receiving intense scrutiny from politicians, consumers and the media. While it seems to many that the situation has only recently happened, it has, in fact, been developing for several years. The beef cow herd on January 1, 2025, was 27.86 million head, down 3.78 million head, or 11.9 percent, from the cyclical peak of 31.64 million head in 2019. The beef cow herd is currently the smallest inventory since 1961. The projected 2025 calf crop is 33.1 million head after declining for seven consecutive years and is the smallest since 1941.

What began as modest cyclical herd liquidation in 2020 accelerated and extended from 2021 through 2024 as a result of widespread, roving drought that impacted most of the beef cattle production across the country. Lack of forage and adverse production conditions forced producers to reduce herds, significantly more than intended.

The beef cattle industry is complex and unique among livestock industries. Cattle are slow-growing animals that reproduce one at a time. One particularly important feature is that breeding cattle and cattle used for beef production originate from the same set of animals. This means that herd liquidation temporarily increases cattle slaughter and beef production. As the beef cow herd decreased after 2019, increased cow and heifer slaughter pushed beef production to record levels in 2022 (Figure 1, blue dashed line projection for 2025). Consumers – and politicians – enjoyed ample supplies of relatively inexpensive beef, oblivious to the fact that it meant that future beef production would inevitably decrease.

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