SACRAMENTO, United States, Feb. 17 (Xinhua) -- U.S. beef prices have climbed to record highs as the country's cattle herd shrinks to its lowest level in decades, underscoring mounting pressure across the industry.
Data released Friday by the U.S. Bureau of Labor Statistics showed that the average retail price of 100 percent ground beef climbed to a record 6.752 dollars per pound, marking the largest monthly increase since June 2020.
Meanwhile, according to the U.S. Department of Agriculture's (USDA) January 2026 Cattle Inventory report, all cattle and calves on feed in the United States totaled 86.2 million head as of Jan. 1, down about 300,000 from a year earlier and marking a 75-year low.
Multi-year drought conditions forced ranchers to sell breeding stock at high rates. "The biggest thing has been drought," said Eric Belasco, head of the agricultural economics department at Montana State University, in an interview on WFMD radio.
Data from the Federal Reserve Bank of Kansas City found that each increase in drought severity results in a 12 percent drop in hay production, a 5 percent rise in hay prices, and a 1 percent reduction in herd size.
Years of dry weather have wiped out grasslands across the West and Plains of the United States, leaving ranchers without enough feed or water to sustain their herds, WFMD reported. Many have been forced to sell cattle early, even the cows needed to produce the next generation of calves.
According to USDA data, the beef cow herd fell to 27.6 million animals, down 1 percent from 2025 and the lowest since 1961, while the 2025 calf crop is estimated at 32.9 million head, down about 2 percent from 2024, marking a record low as well. The industry is now in year 13 of its current cattle cycle and year eight of contraction.
In an analysis by AgAmerica, an agricultural lending company, economist David Anderson of Texas A&M University noted that selling cattle at current prices may still be more advantageous than holding them for future returns.
Kacie Scherler, a fifth-generation rancher in Oklahoma who operates a 2,024-hectare cow-and-calf operation that raises breeding cattle, described the financial pressure in an interview with Bloomberg News. "It actually feels extremely fragile," she said. "So even though cattle are worth more than they have ever been, it costs a lot more to stay in business."
Kory Bierle, whose family has ranched in South Dakota for more than a century, told National Public Radio that he was paying off debts but remained cautious. "We're not partying yet," Bierle said, adding that he would not expand his herd because "it feels like there's always another shock no one sees coming."
Total farm debt will rise 5.2 percent to a record 624.7 billion dollars in 2026, with interest expenses reaching a record 33 billion dollars, according to a February analysis published by the American Farm Bureau Federation. The average operating loan in 2025 was 30 percent larger than in 2024.
Farm bankruptcies across all U.S. agricultural sectors reached 315 Chapter 12 filings in 2025, up 46 percent from 2024, the Farm Bureau reported. More than 160,000 farms closed between 2017 and 2024, according to USDA data.
"The fact of the matter is there's really nothing anybody can do to change this very quickly," said Derrell Peel, a professor of agricultural economics at Oklahoma State University, in an interview on WFMD radio. "We're in a tight supply situation that took several years to develop, and it'll take several years to get out of it."
According to the AgAmerica report, Justin Tupper, president of the U.S. Cattlemen's Association, said it can take up to two years for progress to become noticeable when rebuilding beef inventories.
The Farm Bureau projected in February that cattle inventory is unlikely to expand until at least 2028.
Will Harris, owner of White Oak Pastures ranch, summarized the paradox in a WFMD report. "The American cattle herd is smaller than it has been since the 1950s, and that contraction has pushed beef prices to historic highs," Harris said. "Demand is strong, but domestic supply simply isn't meeting it, and that gap is being felt most by consumers." ■