As grilling season approaches, beef lovers may notice a jump in prices. The nation’s cattle herd is shrinking to historic lows, while demand for red meat remains strong, leaving consumers with higher costs at the grocery store.
Factors such as droughts in grazing areas, skyrocketing feed prices, and ranchers exiting the industry are to blame, say California cattle ranchers.
“We’re facing a situation we haven’t seen in decades,” says Kevin Kester, a fifth-generation rancher. “These are the lowest cow herd numbers since 1951, yet consumer demand has remained steady.”
The demand for beef—fuelled by the popularity of high-protein diets—has led to a significant price hike. In April 2025, beef and veal prices were up by 8.5% year-over-year, with ground beef soaring to $6.02 per pound in May, a 12.15% increase.
Looking ahead, the U.S. Department of Agriculture (USDA) predicts beef prices will continue climbing in 2026, as production is expected to drop by 5% to 25.1 billion pounds.
California ranchers like Kester are feeling the strain of extended droughts, which have decimated pastureland. “Without enough natural grasses, ranchers have been forced to reduce herd sizes to survive,” Kester explains.
The high costs of supplementing with hay have also contributed to the struggle. “People had to liquidate their numbers,” he says. “You couldn’t feed your way out of this.”
Though drought conditions have improved, rebuilding herds takes time. Kester’s current herd is 250 strong, half the size of what it could be. His situation mirrors that of ranchers statewide.
Rizpah Bellard, president of Nova Farming, has carved a niche in direct beef sales to schools. However, despite higher beef prices, Bellard faces rising operating costs, including feed and transportation.
The pressure of contractual obligations limits her ability to raise prices. “My dad and I will keep pushing through, finding a way to make it work,” she says. “This won’t last forever.”
Compounding the crisis is the suspension of Mexican beef cow imports. The U.S. has relied on these imports for years, but the discovery of a parasitic fly, the New World screwworm, has halted shipments.
While officials work toward a solution, the suspension has further strained the beef supply. Federal analysts predict a cattle shortage could extend into 2026, reaching unprecedented levels.
On a brighter note for dairy operators in California’s San Joaquin Valley, hybrid dairy-cattle are increasingly in demand.
These cows, crossbred from Holstein milk cows and Angus beef cattle, are prized for their size, milk production, and weight gain.
The hybrid cows’ offspring are selling at record prices—up to $1,200 for a single day-old calf. Anja Raudabaugh, CEO of Western United Dairies, points out that dairy farmers once sold half their offspring to ranchers.
Now, they’re seeing the demand surge. “Prices are hitting unheard-of levels,” she says. “A cow could cost $4,400, double what it was ten years ago.”
As ranchers fight to meet the surging demand for beef, experts warn that higher prices are here to stay, thanks to a shrinking cattle herd, increasing costs, and unpredictable supply chains.
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