U.S. ranchers finally see profits: Thin herds and high demand have beef prices climbing

There's no quick fix for low herd numbers pushing beef prices higher.
(Graph by Derrell Peel, Oklahoma State University)

After years of hard work and economic struggle, U.S. ranchers are making bank on beef.  "Business hasn’t been this good for cattle ranchers in decades, maybe ever," reports Patrick Thomas of The Wall Street Journal. "Cattlemen are now making a record profit of more than $700 per animal, up from $2 five years ago, according to some industry estimates."

Demand for beef is high and herd counts are at historic lows, creating a market where prices have surged for "everything from ground beef to steaks," Thomas explains. "Retail ground-beef prices set a record in August, up about 13% from the same month last year."

U.S. beef cattle numbers began shrinking during recent droughts that decimated grazing lands, and pandemic-era meatpacking backups. Ranchers couldn't afford their herds and opted to thin them to stem their losses.

Farmers are using their new income to reinvest in their herds, pay off debts and purchase more sophisticated equipment. But no one knows how long higher prices will continue. Thomas reports, "Executives of Tyson Foods and JBS — two of the world’s largest meat companies — have projected that cattle supplies could tick up in 2027 or 2028."

Some ranchers don't think increasing herd size is a good business model and are choosing to invest in better genetics instead of more cattle. Thomas writes, "The idea is to produce cattle that can yield juicier steaks — and fetch higher prices."