Beef Prices Expected to Remain High Through 2026 Due to Tight Supply and Strong Demand

Beef prices continue to rise as the U.S. cattle herd reaches historically low levels while consumer demand remains strong, according to Kansas State University agricultural economist Glynn Tonsor.

"Beef prices are higher because demand is strong and supply is tight," said Tonsor, a professor of agricultural economics at K-State. "You have to understand both sides of that equation."

The U.S. cattle herd is currently at historically low levels. While improvements in breeding, animal health and feed quality mean each animal yields more and better-quality beef than in the past, Tonsor said the increased efficiency hasn't been enough to fully offset the decline in herd size.

"Over the next couple of years, we expect less beef to be produced in the U.S. than in the past," Tonsor said. "That tightening supply supports higher prices."

The cost to maintain a single cow has risen by at least $200 in the last five years, driven by inflation in feed, labor, fuel and equipment. Labor availability in agriculture has also worsened, making herd expansion more difficult.

Trade policy uncertainty and unpredictable export markets add additional pressure. "Anywhere you have elevated risk, most producers and business people more generally tend to get a little more conservative," Tonsor said.

Even when ranchers choose to increase herd sizes, the beef industry's multiyear production cycle means larger herds do not lead to an immediate increase in supply.

On the demand side, Americans consumed more beef in 2024 than the year before and spent more on it, even after adjusting for inflation. Tonsor said this combination signals growing demand.

"Taste is the most important factor in deciding whether someone buys beef," Tonsor said. "More cattle are grading prime and choice, leading to a better eating experience and greater willingness among consumers to pay more."

Tonsor leads the K-State Meat Demand Monitor, which tracks U.S. consumer preferences and demand for meat. The monthly survey is conducted online with more than 2,000 respondents reflecting the national population and is funded in part by the Beef Checkoff and the Pork Checkoff.

Diet trends are also playing a role. Protein-focused eating has gained momentum across age groups, with younger generations placing greater emphasis on protein for fitness and health. The rise of GLP-1 medications has further accelerated this shift, as many users reduce carbohydrate intake and increase protein consumption.

Tonsor expects beef prices to remain elevated through at least 2026, assuming consumer income and confidence remain stable. "If consumer incomes, the job and market environment, and so forth stay the same or better, I'm confident we're going to have higher beef prices," he said.