U.S. Cattle Shortage Sends Beef Prices Higher, Retail Relief Unlikely Until 2028

The U.S. faces a structurally tighter cattle supply that is keeping retail beef prices elevated and likely to do so for years. At the consumer level, beef & veal inflation is near +15% year-over-year, while industry-level benchmarks such as choice wholesale beef rose about 16% in 2025, pointing to persistent upstream shortages rather than a transient price spike. Drought and higher operating costs—including borrowing expenses tied to monetary policy—have trimmed the national herd to its smallest size since the early 1950s, shifting incentives toward selling animals for immediate slaughter instead of retaining breeding stock. That behavioral shift means herd expansion timelines are long; industry analysts estimate that calves born to expand inventories today would not reach typical retail supply flows until around 2028. The squeeze has improved margins for some cow-calf operations in the short term, but rising input costs for equipment, repairs and land rent have left many producers financially fragile. Major processors are also under strain: several beef plants have been shuttered and leading firms have logged losses in their beef divisions, even as they rely on other proteins to buoy group profitability. Federal moves — including stepped-up import approvals for South American beef and a Justice Department probe into meatpacking competition — respond to political pressure, yet imports mainly supplement ground beef and do not rapidly replenish breeding herds. Complicating logistics, live-cattle flows from Mexico were paused after the reappearance of the New World screwworm, removing a near-term supply channel. Price signals are already reshaping behavior: replacement heifers rose only modestly year-over-year, and feeder-calf and bottle-calf prices have climbed sharply, reflecting intense demand for animals for finishing. For consumers, elevated beef costs exert a localized upward pull on food inflation and on households’ inflation expectations, even if they do not change headline monetary policy trends by themselves. For policymakers, the situation presents a difficult mix: concentrated processing markets and thin herd inventories limit quick fixes, while any attempt to lower retail prices through imports or antitrust action will be constrained by biological and logistical lags. In short, unless producers begin a sustained and profitable re-breeding cycle, shoppers should expect high beef prices to remain the new normal for the better part of this decade.