Beef prices in the United States hit historic highs this summer, with consumers paying an average of $6.12 a pound for ground beef in June and steak prices climbing 8 percent compared with a year ago. At the same time, America’s cattle herd has shrunk to 94.2 million head — the smallest July count since records began in 1973. 

Yet even as shoppers pay more and ranchers struggle with thinning margins, the industry’s biggest processors continue to see profits, raising questions about who is really benefiting from the shortage.

“Supplies are tight compared with demand, leading to record-high prices for cattle and beef,” a professor in agribusiness at Oklahoma State University, Derrell Peel, tells the New York Sun. “This situation has been developing for several years, but consumers are only now fully realizing the impact.”

A Pandemic-Era Promise

When Covid-19 outbreaks shuttered major meatpacking plants in 2020, it exposed how much of America’s beef supply came from just a handful of facilities. To address the vulnerability, the Department of Agriculture announced a $500 million initiative in July 2021 to expand the capacity of small and mid-sized processing plants. 

Post-pandemic programs administered by the department in 2023 were designed to channel funds toward new equipment, workforce development, and expanded slaughter capacity. A spokeswoman for USDA tells the Sun that the department continues to support farmers, big and small. 

“Through the Local Meat Capacity Grant Program, USDA has provided over $55 million to expand meat and poultry processing, creating 660 jobs and benefiting nearly 8,000 producers. The Meat and Poultry Inspection Readiness Grant program has delivered $54.6 million to 237 facilities, with 118 now federally or state inspected and able to ship across state lines,” the representative said. 

Additionally, she said, the department’s Agricultural Marketing Service “has funded $5 million in projects through the Local Agriculture Market Program to strengthen meat and poultry processing across 14 states.”

Two years later, however, many on the ground argue that the industry’s structure looks largely unchanged. The four largest processors — Tyson, JBS, Cargill, and National Beef — still handle about 85 percent of fed-cattle processing in the United States.

While USDA grants have helped smaller plants modernize or expand, the improvement has been restricted by limited labor pools, high borrowing costs, and most importantly, a shrinking national herd.

“The big companies seem intent on squashing the additional estimated 10,000 head per day expansion stimulated by the USDA grants,” the CEO of family farm Brasstown Beef, Steven Whitmire, tells the Sun. 

In other words, federal grants for smaller plants cover only a fraction of expansion costs. This leaves most of the financial burden on the companies themselves, making it hard for them to compete with large, well-capitalized processors.

Profits and Pressures

The financial reports of the industry’s major players reflect this market imbalance. JBS S.A., a Brazilian-owned global corporation and the world’s largest meat company, reported a record-high net revenue of nearly $21 billion in the second quarter of 2025. This achievement came despite a challenging period for its North American beef division, which recorded a negative operating margin due to the tight cattle supply. 

JBS was able to offset its domestic beef struggles with a strong performance from its diversified businesses, including its U.S. poultry company, Pilgrim’s Pride, and its international operations in pork, chicken, and other markets. This ability to absorb losses in one sector with profits from another is a significant advantage that smaller, specialized meat processors cannot typically replicate.

Despite the high costs and reduced supply, demand for beef has barely faltered, with  many Americans continuing to purchase premium cuts. With the “Make America Healthy Again” movement encouraging red meat consumption, Americans are maintaining ingrained habits. 

That steady demand helps large processors maintain substantial revenue, while smaller firms and consumers feel the squeeze.

International Imports: Who’s Filling the Gap?

As domestic supply is constrained, imports have become an increasingly important factor. According to former cattle industry attorney and antitrust plaintiff, Bill Bullard, “imports are now at a record high.” 

Last year, at least 22 percent of the beef consumed in America was imported. 

“This is a threat to our national security,” Mr. Bullard tells the Sun. “Global packers benefit from exporting U.S. beef while simultaneously supplying domestic markets with cheaper imported beef.”

Most imported beef used to come from Brazil and Australia, but steep U.S. tariffs — over 75 percent on Brazilian beef — have sharply curtailed shipments. Australia continues to supply significant volumes, though not enough to fully compensate. 

Canada and Mexico also contribute notable quantities, particularly of ground beef; however, many imports may now face a 25% tariff unless they conform to United States-Mexico-Canada Agreement rules. Imports from Mexico were temporarily halted in July due to an outbreak of New World screwworm, a parasitic fly that threatens livestock health.

“The closure of the Mexican border for feeder cattle imports has tightened cattle supplies in the near term, but U.S. processors are supplementing with foreign beef, especially for ground beef,” the director of protein and grain market analysis at CattleFax, Troy Bockelmann, tells the Sun. “Prices for ground beef have risen more than other cuts due to this tight supply.”

These imports disproportionately benefit multinational packers and foreign ranchers, allowing global companies to profit from exporting American beef and supplying cheap alternatives back into the U.S. market. Meanwhile, domestic ranchers face high feed costs, labor shortages, and uncertainty, making herd expansion less appealing.

Why the Herd Isn’t Rebuilding

The root cause of the shortage is the cattle cycle itself. Historically, the industry has experienced cyclical ups and downs, but years of drought, particularly in the western United States, have forced ranchers to cull heifers that would otherwise have been kept for breeding.

Mr. Bockelmann explains that moisture conditions have improved in much of cattle country, but persistent drought in the West, combined with high interest rates and capital requirements, discourages ranchers from retaining heifers for herd expansion. 

“Growing the cowherd tightens supplies in the short term because the heifer is not going into the beef supply,” he said. “Labor constraints and an aging producer base also slow growth.”

The financial calculus for ranchers is stark. With finished cattle fetching high prices, many opt to sell calves rather than retain them for herd building. 

“Until prices are reduced, you will not see herd building take effect,” said Mr. Whitmire. “The way this is playing out in the open market, the big packers’ cross-subsidization from pork and poultry profits puts smaller packers at an extreme disadvantage.”

Mr. Bullard traces the problem further back. 

“The cattle herd has been shrinking for decades. The recent drought merely exacerbated the ongoing decline. Over the last 40 years, we’ve lost 665,000 producers and over 9.2 million beef cows,” he tells the Sun. 

The combination of a long-term decline, increasing imports, and an aging rancher population has created a market where rebuilding the herd is both financially and biologically slow. Analysts project that it will likely take until 2027 or 2028 for the American beef supply to expand meaningfully.

Has Washington’s Bet Paid Off?

The USDA’s $500 million investment was intended to make the beef supply more resilient by supporting small processors. While some local plants have benefited, the dominant position of the Big Four packers remains intact. Supply shortages mean that expanded kill floors alone cannot bring prices down.

Mr. Bullard emphasizes that new plants face an uphill battle.

“Until and unless the Administration and Congress take steps to rein in the Big 4 packers’ control over the market, many of these new plants will struggle,” said Mr. Bullard. “We can’t expect an improvement in competition when the structure of the market remains fundamentally broken.”

Even when USDA funding helps local plants expand, the dominance of a few big companies keeps their impact small. 

“One must be careful to presume the industry is not resilient,” a professor of agricultural economics at Kansas State University, Glynn Tonsor, tells the Sun. “Explicit action may not be required in the short term, but it is too early to see measurable competitive effects from the federal and state efforts since 2021.”

Looking Ahead: Prices, Policy, and Consumer Impact

The high cost of beef reflects both supply limitations and strong demand. 

 “It’s a combination of fewer cattle and profits in the feeder sector,” said Mr. Whitmire. “Consumer demand has been steady, so the industry is producing all it can to supply that demand.”

Mr. Bullard contends, however, that policy interventions could shift the balance: These could include reinstating mandatory country-of-origin labeling; broadening tariffs on foreign beef; and enforcing antitrust laws to dismantle overly concentrated packer control. 

These steps, he underscores, could help American producers rebuild herds and reduce reliance on imports, but the biological cycle of cattle means any relief will take years to manifest.

The senior director at the National Cattlemen’s Beef Association, Hunter Ihrman, agrees the cattle supply is reduced but insists there is not a “beef shortage.”

“The current higher prices for beef are the result of simple supply and demand,” he tells the Sun. “Currently, there is a smaller supply of cattle, which means the value of those cattle and the resulting price of beef have increased.” 

Mr. Ihrman’s view underscores the broader tension between perception and reality: while ranchers and consumers feel squeezed, industry insiders see the current situation as a predictable outcome of market forces.

Until the herd rebuilds and competition is restored, the beneficiaries of the “beef shortage” remain the largest players, both at home and abroad. At the same time, ranchers and shoppers bear the cost as meat continues to fill up America’s grocery carts.

 “Consumers continue buying beef despite higher prices,” said Mr. Peel of Oklahoma State University. “It will likely take three to four years to significantly increase production.”

The USDA did not respond to a request for comment.