Beef Prices Just Hit Record Highs and Ranchers Say It’s Worse Than You Think

Beef prices in the U.S. have officially broken records, jumping nearly 9 percent since January, according to the USDA. Steaks and ground beef have seen double-digit spikes, with some cuts costing over $9 a pound. But if you think you’re feeling the pinch, cattle ranchers say they’re getting squeezed even harder.

“It’s way more complicated than eggs,” said Michael Swanson, chief agriculture economist at Wells Fargo, CNN reported. Unlike the egg market, where supply and demand are tightly controlled, the cattle industry runs more like the Wild West—unpredictable, costly, and increasingly unsustainable.

Shrinking herds, relentless drought, and skyrocketing feed costs have all but gutted ranchers’ profit margins. The American Farm Bureau Federation reports U.S. cattle herd sizes are at a 74-year low. Even with beef selling at record prices, many ranchers are barely making it.

One of the biggest problems? The cost of keeping cattle fed. Drought has devastated grazing pastures, forcing ranchers to rely on expensive feed. And while retail prices soar, those increases haven’t translated into better margins for the people raising the cattle.

At the same time, imported beef from countries such as Argentina, Brazil, and Australia now accounts for approximately 8 percent of U.S. consumption. As domestic supply tightens, foreign producers are stepping in, and they’re happy to sell to American consumers at premium prices.

Even major retailers are scrambling for solutions. Last month, Walmart opened its first in-house beef processing facility, aiming to cut out middlemen and rein in supply chain costs.

Related: Walmart Employees Sound the Alarm as Prices Soar

But the real kicker? Demand isn’t slowing down. Americans are still buying beef, despite the price hikes. If that demand drops, especially if household budgets tighten, ranchers could find themselves stuck with high-priced cattle just as prices collapse.

“I say we’re closing in on the peak of this current cycle,” Swanson said. “That’s the real concern for the industry—no one wants to be left holding the bag.”

For now, ranchers are hanging on. And if you’re wondering when beef prices will cool off, the honest answer is this: It’s going to get worse before it gets better.

Related: Southwest Egg Supply Shaken as Major Producer Shuts Down