Beef Inflation: Whose Fault?
Tariffs, farmers, and consumers lock horns.
(Photo by: Lindsey Nicholson/UCG/Universal Images Group via Getty Images)
Americans love their hamburgers as much as buffalo wings and fried eggs, and all three are increasing in price. Mainstream media headlines suggest President Donald Trump’s proposed tariffs could increase food inflation, and critics started blaming him for high egg prices within hours after his swearing in. It appears many would be apoplectic if Trump brought food prices down, so desperately do they want him to fail. The truth is more nuanced than accusing tariffs. Whatever beef the president’s critics have, consumers are willing to pay higher prices for steaks and burgers, and US farmers are overdue for some positive economic news.
Beef Prices Rise
Beef prices have been rising steadily for a while as inventories have dwindled due to several years of severe drought. Droughts reduce grazing yields for ranchers, which forces producers to feed more expensive grains to keep their animals growing even as hay prices also rise. The coronavirus pandemic caused interruptions in processing facilities, creating an additional crisis for farmers. The result is the lowest number of cattle for US herds in 74 years. Similar pressures on input costs and profitability have shrunk the Canadian cattle herd to its lowest numbers in 36 years.
But these aren’t your granddaddy’s cows – improved genetics and feeding systems grow bigger bovines than in ranches of yore, and the United States has increased both imports and exports of beef. Higher land prices and competition with countries such as China and Saudi Arabia for US haylage have steadily squeezed profit margins for beef farmers, forcing many to shift to more profitable pursuits or sell up to developers. Aging farmers are not replaced by the next generation when profitability plummets. These pressures have been building for years. Beef prices were up 5.5% in January over 2024, with the average cost of ground beef up 43% since early 2020 in US cities.
Rampant food inflation during COVID-19 lockdowns and federal profligacy under Joe Biden did not help beef herds build back better. Prices are rising because consumers are willing to pay for their favorite meals: Sales of exotic Wagyu have steadily risen. For decades, the federal government told Americans eggs and red meats are bad for human health: Since that “real science” has been debunked (the FDA now acknowledges that eggs are healthful), Americans are not allowing higher prices to compromise their health or palates.
Pricing the Horizon
One reason for the recent bump in beef prices was a ban on imports of Mexican beef due to concerns about New World screwworm. Mexican cattle imports have resumed, and beef industry analysts have revised available US cattle numbers upward from previous estimates. Prices will stay high in 2025, but cows are not threatened by bird flu or culled by the government like poultry. Americans will still have plenty of beef for Independence Day 2025.
The USDA’s Economic Research Service reports that US beef import forecasts are unchanged month over month and “export projections are raised from last month to 2.795 billion pounds on increased beef production available for export.” It turns out it is not just Americans who like steaks and burgers.
Tariff scares are politically overblown. Yes, 25% tariffs on Canadian and Mexican beef could add substantial costs to farmers in those nations and stop many cows from coming (legally) over their borders. These countries will have to decide whether they wish to support their domestic beef producers by policing the human traffic that has prompted the penalties. If tariffs cause higher prices, that is a bonus for US farmers and ranchers, whom consumers in the United States take for granted. Higher prices will increase farming profit margins and support the future of US agriculture – a good thing for consumers and diners alike.
Trump vs Biden
Trump did not cause the current cow shortage. Herds are not built quickly and are not enlarged by government spending the way the previous administration subsidized solar panels or EVs – there is not much to eat there. Trump has committed to revising USDA and FDA regulations to support domestic agricultural production and improve nutrition content for SNAP recipients. Republican dominance in Congress promises to enact the PRIME Act, which would greatly expand the ability of small meat producers to sell directly to local consumers. Robert F. Kennedy Jr. seeks to curtail the regulatory capture of the EPA and FDA, which favor large industrial food producers and processors at the expense of family farms.
LN author John Klar, Mary the cow, and Bea the dog (Credit: Liberty Nation News)
These and other initiatives promise to increase domestic beef and agricultural production over the long term, which is required to reverse longstanding drags on farmers and ranchers. Instead of retiring farmers selling their intergenerational lands to Bill Gates, China, or hedge funds, a younger generation will likely take the reins and maintain domestic production. These are positive improvements, regardless of tariffs.
American consumers should be happy that farmers will finally be supported by sustained modest price increases instead of shackled with high input costs, overregulation, and attacks by animal rights activists who seek to compel the consumption of bug burgers and fake factory beef facsimiles made from chemical-dependent GMO monocultures that pollute more than grazing cows. Cows have been falsely slandered as climate change culprits, but the opposite is true.
Bison built the American prairies, and farmers have quietly provided the nation’s palate with healthy meats for two centuries without complaint. They should be appreciated for their devotion to the land, as should their vital cowherds. Beef farming is as American as apple pie.
Now please thank your farmer, and enjoy that burger!
(Originally published at Liberty Nation News,)
Excellent piece! As a former farmer and also a meat market manager, I agree wholeheartedly with your assessment. Several farmers in my area, who I talk with, are selling directly to the public. The change is happening.
I can give you some insight to the beef issue. I have provided financing for actual farmers for the last 42 years and I have financed a lot of cattle feeders in the corn belt and cow calf producers as well. I am the only guy that has gotten to see underneath the dress so to speak. The roots of the beef inflation lie in the fact that there are very few beef processors. IE its Tyson Meats, JBS, Cargill and National Beef control 85% of the beef processing in the United States. They use this market concentration to control the price of beef for their benefit like anyone else would if they could.
in 2020 during COVID this is what they did. The Government required the beef processors in an attempt to slow the spread of COVID in their plants to spread out their workers which resulted in a slower pace of the cattle through the plant (this is referred to as line speed) So the plants had a lower output and it caused a back up in the country as fat cattle which were ready for slaughter could not be slaughtered. I had customers who had cattle ready for slaughter in the spring of 2020 that had to wait for up to a month just to get a bid from the local Tyson Beef plant and then they had to continue to feed the cattle for several weeks longer. This back up in the country of fat cattle caused the price decline severally for the cattle feeder resulting in losses. At the same time the Beef Processors where telling the retail outlets that the product was going to be in short supply causing retail prices to go up. The result was that for most of 2020 the cattle processors were making roughly $1000 per head while my customers were losing Hundreds of dollars per head. Since my customers were losing money when they went to replace those cattle they were not able to pay as much for the feeder calf. The cow calf producer was getting less for their calf and since the majority of the cow calf operations in the plains are always just one day away from a drought disaster, they culled their herds of the unprofitable cows and stopped growing the cow herd resulting in the fewer calves we are seeing now.
Even when things are normal the cattle feeders have a 15-20 min window each week to sell cattle. They typically get a call late in the week Thursday or Friday with a cash bid for next week. They have maybe 15-30 minutes to call back if they wish to accept this bid. If not they will wait till next week.