For beef prices to drop, ranchers need to raise more cattle. Here’s why they’re not

The U.S. contains the fewest cattle since 1951, which is pushing beef prices up. Expanding the herd has been complicated for ranchers, however.

By Michael MarksJune 30, 2026 10:59 am, ,

From Harvest Public Media:

Although the U.S. cattle population has dropped for six straight years, industry watchers like Derrell Peel think the herd could shrink even more.

“We still don’t know for sure that we actually have a low in place yet,” said Peel, an extension livestock and marketing specialist at Oklahoma State University.

The U.S. Department of Agriculture reported in January that the country’s cattle population was 86.7 million, its lowest level since the early ‘50s. At the same time, the price ranchers receive for their animals has risen.

“We’ve got record high [cattle] prices. That’s to provide incentives for rebuilding the herd. But at this point in time, we’re not seeing that happen,” said Peel.

The small cattle population contributes to high beef prices in grocery stores. The average price of ground beef reached $6.89 per pound earlier this year, setting a record. The USDA estimates beef prices will likely rise 10% through the rest of the year.

Despite those high prices, ranchers are not growing their herds.

Multi-year drought in major cattle-producing states such as Nebraska, Oklahoma, and Texas have kept herd size down. The high cost of doing business and the reemergence of the New World Screwworm have also contributed to the trend.

“If we think about years past, we would’ve seen growth with these record-high cattle prices. That’s the market telling us to produce more,” said David Anderson, professor and extension economist at Texas A&M University. “But I think there’s some good reasons we’re not.”

Long-term drought

Before beginning its multi-year drop, the U.S. cattle population peaked at 94.7 million animals in 2019. Since then, much of cattle country has been degraded by a lack of rainfall.

“Starting in … late 2020 through up until even current times, we’ve had lots of drought conditions pretty much all over the country at some point in time. And so that forced [cattle] producers to do more liquidation than they planned,” said Peel of Oklahoma State.

Lack of available water can force producers to sell animals. So can a scarcity of food.

Peel said that pastures can take multiple years to rebound from extreme drought. Year over year of marginal rain will diminish the forage options for cattle, forcing producers to stock fewer animals.

“I’ve had to shrink my own herd to adjust to the feed that’s available,” said Kevin Buse, a north Texas rancher and the CEO of Champion Feeders, a company with feedlots in Texas, Oklahoma and Nebraska. “When feed costs are elevated and you do not have enough grass, the obvious reaction to that is to start to pull back on numbers.”

Feedlots took on nearly 10% fewer cattle in May of this year than in May 2025, according to Anderson.

National Agricultural Statistics Service

The USDA released its report on the U.S. cattle herd size in late January of this year. It's next release will be in late July.

Some of the land around him that used to support cattle has been sold for other purposes in recent years, including data centers and wind farms, Buse said.

His feedlot business buys cattle from ranchers, then sells them to meatpacking businesses after the animals gain weight. The scarcity of cattle has cut into his bottom line. That’s been exacerbated by the reemergence of the New World Screwworm, a parasitic pest that was recently rediscovered in the United States.

In May 2025, the U.S. Department of Agriculture barred Mexican livestock from entering the U.S. to try to prevent the screwworm’s spread. Doing so took away a major source of cattle for feedlots like Buse’s.

“That’s caused a considerable, considerable amount of adjusting in terms of replacing those cattle,” said Buse.

Disruptions for packers

Meatpacking companies, which slaughter animals and prepare their meat for sale, have been particularly affected by the low cattle population.

Most of the U.S. meatpacking business is controlled by the so-called “Big 4:” JBS, Cargill, Tyson Foods, and National Beef. Their plants rely on processing a large number of animals, so the country’s persistently small cattle herd has created problems for them.

Meatpacking plants in Nebraska, Texas, Pennsylvania and Tennessee have closed or reduced operating hours in 2026.

Buse, whose feedlot sells cattle to the meatpackers, has “grave concern” about the trend.

Rachel Osier Lindley / The Texas Newsroom

A cow and three calves stand together at the Fields Ranch outside Canadian, Texas on Monday, Feb. 24, 2025.

“Those things make you nervous because they are the ones that pay us for our cattle,” said Buse. “We need the packing community to flourish.”

Peel thinks further packer closures are possible in the near future, given market conditions.

“Particularly with very little prospects that cattle inventories are going to grow anytime soon, I would not be surprised to see some additional adjustments as we go forward,” Peel said. “It’s never clear exactly who would do that or where or how, but it’s certainly a distinct possibility.”

Additional disruptions in the meatpacking business could drive beef prices even higher for consumers.

Despite current near-record prices though, beef buying hasn’t slowed. Demand is still strong, according to Anderson of Texas A&M.

“Everybody’s been wondering if we can get to some tipping point where, really from an income standpoint, people really pull back and quit buying. And so far we haven’t had that,” Anderson said.

‘We need more competition’

Anderson and Peel said that even though the country’s small cattle herd has persisted longer than they expected, market forces will eventually catalyze growth.

Other industry observers want the federal government to take direct action, however.

Farm Action, a nonprofit agriculture watchdog group, recently released recommendations to help rebuild the country’s herd. Those include building greater competition among meatpackers, offering tax credits to ranchers who retain heifers, and mandating country of origin labeling so consumers can know exactly where their beef comes from.

Sarah Carden, research and policy director for Farm Action, said these measures would help bring down prices in grocery stores.

“We need more competition [among meatpackers],” said Carden. “But also, you can’t do that without enforcing more market transparency measures, without enforcing robust antitrust enforcement, without helping and supporting create markets.”

The Trump administration announced they would investigate monopolistic behavior by the Big 4 meatpackers, including price fixing.

The USDA will release new data on the size of the U.S. cattle herd in July.

This story was produced in partnership with Harvest Public Media, a collaboration of public media newsrooms in the Midwest and Great Plains. It reports on food systems, agriculture and rural issues.

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