2025 Beef Prices...What Gives?
- muenstergrassfed
- Oct 15
- 9 min read
Introduction: We have all been to the supermarket and have seen the high price of beef lately. My family ran out of beef in our deep freezer, and we have to buy from the store until we get it filled back up. I was looking at a chuck roast the other day at the store which was over $10/lb.! Last year the price of beef was high, and this year, it is substantially higher still. I want to break this down for everyone to explain what is going on in the cattle market and why we are having to raise our prices so much this year.
Low Supply: First and most importantly, cattle numbers are low. The US Cattle herd peaked in 1975 with an all-time high of about 132 million head of cattle.[1] In 2025, we are sitting at about 94.2 million head. [2] This seems like a huge difference, but it’s not a direct comparison. Advances in genetics and feedlot practices have changed the game. Ranchers and bull breeders have performed decades of work perfecting the genetics going into the US cattle herd. These advances have allowed feed yards to push steers to heavier and heavier finishing weights. In 1975, the carcass sizes were around 600 lbs. vs. the 900+ lbs. today. In 1975, the US processed 24.4 billion pounds of carcass weight vs. 25.9 billion pounds today in 2025. This means as an industry we are doing more with less which is a good thing. The problem is that we hit a peak of production in 2022 with about 28.3 billion pounds of production. This is a very substantial drop which is bad news.
Droughts: Several factors explain this production drop, starting with environmental challenges. As most of you noticed, we have been in a series of pretty bad droughts over the past few decades. Yes, this year was a nice reprieve for North Texas, but the seasonal rains we received didn’t necessarily make it to other cattle production areas. These fairly consistent drought conditions result in ranchers selling off portions if not all of their herds. I took a drive through Oklahoma just a few weeks ago to look at some equipment driving hundreds of miles on two different routes. I saw very few cow-calf operations in what should be the heart of cattle country. While this may seem like anecdotal evidence, take a drive yourself through Texas or Oklahoma and keep an eye out for cow-calf operations. There just aren’t as many as there used to be. These droughts have taken their toll on ranchers, and they are not too keen to rebuild their herds.
High Cattle Prices…A cure or barrier to entry? I have heard it said that “the cure for high cattle prices is high cattle prices.” This certainly was true in 2014 when the price of feeder cattle peaked at $2.45/lb. It didn’t bottom out until 2020 when it reached a low of $1.04/lb.! Those were really hard years for ranchers. Usually, a rancher can figure that out of a 10-year period that he can make a profit 2/10 years, break-even 6/10 years, and lose money 2/10 years. It wasn’t like that between 2016-2022. Ranchers just flat-out lost money every year. Coupled with various droughts that hit at that time, a lot of ranchers just broke and threw in the towel. Now, prices are at record highs. As I am writing this article, I glanced over to see the price of the Feeder Future Contract for October 2025. It is sitting at $3.80/lb. which is an impressive 300+% increase in a little over 5 years!
Now seems like the time to expand the cow herd, or so it appears. Let’s pump the brakes and think about this. A bred, older cow is going for $3,000+ at local sale barns. Young cows are going for $3500-4100/head. Let’s say a rancher needs to stock his place with 40 cattle to replace the ones he sold off in a drought a few years ago. Not very many ranchers have $150k in cash lying around to buy cows. So that means they have to go to the bank and pay 6-8% interest. With 40 cows, a 7% interest rate comes out to $262/head per year. Then the rancher will have to figure rent, feed/hay, labor, transportation, fertilizer and chemicals, medicine, vet bills, and the list goes on. We all remember the market tanking after 2014. Why in the world would anyone take the risk when it is possible that it may happen again? The high prices and high interest rates are cutting out the prospective young ranchers as well. I can’t imagine taking on that much risk when in the best-case scenario, a rancher with above average husbandry and management skills can clear $200-400 profit/head in today’s record high market. $400x40 head = $16,000. I certainly can’t live off that; it takes closer to 150 head of cows to make a living for one rancher. That $150k note just became a cool half-million. It makes me sick thinking about taking on that much debt especially for cattle which could drop by 50% in a matter of months.
Aging Ranchers: There are a lot of 60+ year old ranchers. They have been doing this for a while, and they have been burned by multiple price cycles. They have also been kicked, run over, squeezed, and who knows what else by huge animals with a mind of their own. My brother and I can count multiple deaths and severe injuries caused by cattle in Cooke & Montague Counties just in the last 25 years. It is dangerous work; it’s stressful work. Cattle prices are at an all-time high. Pasture rents are really high. Why not just sell out and rent the land to someone else who wants to take on the risk? It’s tempting for my brother and me, and we are in our 40s. I imagine the temptation is a lot higher for the old-timers. I don’t think the US herd expansion will come from the older generation, and it’s next to impossible for it to come from ranchers wanting to start out unless they get a sweetheart deal from a family member. That leaves the established middle-aged ranchers to grow the US cow herd, and there are not that many of us. Analysts think the herd will start to recover in the next few years, but I have a hunch it isn’t going to be very fast for the reasons described above.
The New World Screwworm: These pressures alone justify high feeder prices, but unfortunately for consumers, there are further pressures adding to the cattle market’s record run. The New World Screwworm has made its way back into Mexico after being eradicated for decades.[3] Reemergence in Central America has enabled its spread to Mexico. A screwworm is a parasitic fly that lays its eggs into cuts or open wounds on cattle or other mammals. The maggots feed off of live flesh torturing cattle. My father remembers constantly dipping their cow herd in pesticides to battle this terrible fly. American ingenuity came to the solution with a strategy to push the screwworm back to Panama using airplanes full of sterile male flies. This was a huge victory for both American and Mexican ranchers. Now this fly is back in Mexico, and the US did the prudent thing of shutting off imports for any livestock coming from Mexico until it gets pushed back. We do not want the screwworm back in the United States! Over a million cattle were imported from Mexico annually before this, so the ban significantly impacts regional beef supply chains.
The Expanding Money Supply and Inflation: We all know what happened during the pandemic. The U.S. government injected trillions into the economy. We didn’t see inflation right off. The $4.6 trillion in relief was a significant cause of inflation, but the problem occurs not only at the printing press of the US Treasury but the invisible printing press at the bank. When we put money in the bank, the bank is required to hold a certain percentage of that cash in their reserves. The rest they can lend out. This reserve requirement ranges from 0-10%. I just found when writing this article that the Federal Reserve reduced the reserve requirements to 0%.[4] That means that in theory 100% of your deposits can be lent out by banks to stimulate the economy. Usually, banks are not this irresponsible, and they voluntarily hold 10-15% in reserve. Given this information, as people deposit money, as banks loan out money, and as this recursive cycle repeats, the monetary base increases causing inflation on top of the direct Treasury injections. The Federal Reserve is pretty confident they have inflation under control through their high interest rates (although I have my doubts). Still, we can’t discount the effect of inflation on current cattle prices. Roughly speaking, our dollar has lost 25% of its purchasing power since 2020.
High Demand for Beef: Finally, we get to the demand side of the supply & demand curve. Americans love protein and especially love beef! It’s delicious. Demand for beef peaked in the mid-1970s with Americans consuming about 87 lbs. each. Now we are sitting at about 59 lbs. of beef consumed per American per year. This is a pretty significant drop on an individual basis, but keep in mind, the US Population has grown by about 150 million people since the 1970s. I think people are starting to wake up that we were fed a bunch of bull in the 1990s with the low-fat craze. Remember eating those nasty egg-beaters, fat-free margarine, skinless chicken, and the fat free chocolate cookies in the 90s. It was terrible. We ate all this processed food that was fake. Look what it has done to us as a whole. Is the country as a whole thinner and more fit than in the 1970s? Again, I will give some anecdotal evidence, but I have heard from enough people to know that it is more than that. I lost 20 lbs. last winter by cutting out 75% of the carbs that I was eating and replacing the calories with fat and protein with our beef as a significant portion. I hear basically the same story with anyone who does it and sticks with it for a few months. These low-carb diets, to include the Carnivore diet, are here to stay. It’s not a fad. Beef will remain a cornerstone in these diets because it is very nutrient dense. I don’t think demand is the primary driver in this current cattle price cycle. However, just a little extra demand in beef will result in pretty substantial increases in price now because the supply is so tight.
What is Muenster Grass Fed doing? We are left in a difficult position this year. We can easily take 60-75% of the profits we may make right now by bringing the cattle slotted for grass-finishing to the sale barn. Trust me, this is tempting because it is a lot of work growing and selling this beef, and there is a lot of risk we take on. At the same time, we don’t want to lose any of you as customers. If we take the easy way out by taking our cattle to the sale barn this year, a lot of you won’t be back again. When times get hard (which they will again), we really do appreciate you buying from us. We don’t mind taking a hit on our overall profit margin percentage to keep our customer base, but we must make some profit off of this enterprise. Unfortunately, we have to raise prices this year by the most ever on a year over year basis. We’re doing our best to keep the price hike as low as we can for you. Consider that prices of feeder cattle have moved from $2.45/lb in October 2024 to $3.80/lb now in October 2025. That is a 55% increase in the feeder cattle market. We are keeping our price increase at 20% which seems reasonable by comparison.
I know our beef is going to be expensive this year, but it is expensive at the store too. We’re pricing our half beef at about $9.59/lb, take-home meat, processed at Fischer’s Meat Market. This matches supermarket rates like HEB ($9.13) and Kroger ($10.15) for comparable cuts and quantities. Prior customers will also get a slight discount at ~$9.43/lb. Keep in mind beef at the supermarket is coming from the commercial cow herd of America with unknown quality. We work hard to bring you a premium product to exceed what you can find at the supermarket. Our superior Angus genetics, our unique grass-finishing process, and the dry aging at our processors results in great beef. Those of you that have ordered for years know this about us.
Conclusion: Cattle prices are no joke in 2025, and it’s coming from all sides. The U.S. cattle herd is at its lowest in decades thanks to brutal droughts, crazy-high costs to rebuild, and a lot of older ranchers calling it quits. Young prospective ranchers aren’t exactly jumping in either—the risks are just too steep. Inflationary pressures along with the rising threat of the New World Screwworm restricting imports from Mexico, have exacerbated an already critical supply deficit. At Muenster Grass Fed, we will continue to strive to keep prices in line with what you see at the supermarket while providing a product superior to most of what you can find at the store. We are really grateful to all of our loyal customers for sticking with us through the years. We will get through this crazy market together.
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