For Immediate Release: February 27, 2026
Contact: R-CALF USA CEO Bill Bullard
Phone: 406-252-2516; r-calfusa@r-calfusa.com
Please find below R-CALF USA’s weekly opinion/commentary that explains the real reasons why the U.S. cowherd inventory is so low and consumer beef prices are now the highest in history. It is in three formats: written, audio and video. Anyone is welcome to use it for broadcasting or reporting.
Part 1: The State of America’s Beef Industry
Commentary by Bill Bullard, CEO, R-CALF USA
Beef is the centerpiece of today’s discussion about consumer affordability. You’ve probably heard that today’s high beef prices are the result of a recent widespread drought that reduced the size of the domestic cattle herd, and the recent closure of the Mexican border due to the threat of New World screwworm that deprived the U.S. of previously available foreign cattle supplies. This combination is said to have reduced overall beef supplies in the face of strong beef demand, resulting in all-time record beef prices.
You’ve probably also heard that this situation materialized without warning; was primarily caused by these two unforeseen but temporary circumstances; and that their effect on beef prices can be mitigated by importing more beef and cattle from around the world.
This is incorrect. Today’s extreme beef supply–and–demand imbalance is the manifestation of decades of failed policies that have dismantled the cattle industry’s competitive infrastructure, increased America’s dependency on imported food, hollowed out America’s rural communities, and threatened our nation’s food security.
The recent drought and border closure have merely illuminated the vulnerability of America’s food supply chain.
Let’s take a closer look at what is the single largest segment of American agriculture. It generates roughly $100 billion in cash receipts annually, provides Americans with life-sustaining protein, and serves as the economic cornerstone for rural communities across the nation. That segment is the U.S. cattle industry.
The cattle industry does not receive government price supports, so the production of beef is not influenced by government price incentives as is the production of other major commodities such as corn, soybeans, wheat and cotton.
Instead, the cattle industry relies exclusively on competitive market signals to balance supply with demand through the expansion and contraction of the cow herd. This created what is known as the cattle cycle. When supplies fall short of demand, cattle prices increase and the cow herd enters an expansion phase. But when supplies meet or exceed demand, cattle prices fall and the cow herd enters the liquidation phase. The cattle cycle has historically lasted 10-12 years, involving six to seven years of expansion and three to four years of liquidation. This cattle cycle is the industry’s bellwether indicator of its competitiveness.
Because cattle have the longest biological cycle of any farmed animal, the cattle industry cannot respond quickly to an increase in beef demand – it takes about three years from the time the decision is made to begin expanding the herd before a new animal can be ready for slaughter (hold back females, breed with nine months’ gestation, and 15 to 18 months to grow to slaughter weight).
Now, since the only ingredient in beef is cattle, consumer beef prices likewise fluctuate with the cattle cycle, rising during the expansion phase and falling during liquidation.
Thus, consumer beef prices and the cattle farmer and rancher’s cattle prices were driven by competitive market forces – at least they were until just over a generation ago.
Let’s go back to just over a generation ago, to 1980. Back then, the beef-packing industry was widely dispersed, and the four-firm concentration level was 36%, meaning the four largest beef packers controlled 36% of the fed cattle market (fed cattle are cattle raised exclusively for beef production). At that time, the U.S. had 1.3 million cattle farmers and ranchers who maintained 37 million mother cows. And back then, competitive market forces allocated each dollar consumers spent on beef to all the participants in the supply chain. Under the competitive market’s allocation, cattle farmers and ranchers received 63 cents of each consumer beef dollar, and packers and retailers together received 37 cents. For consumers, the spread between the farm–gate price of cattle and the consumer price of beef was about 88 cents per pound.
Now fast-forward through a generation to 2021. The four-firm concentration jumped to 85%, meaning the four largest beef packers that dominated the fed cattle market were now a tight oligopoly (similar to a monopoly in which one firm controls the market, an oligopoly is created when a handful of firms dominate the market, and a tight oligopoly occurs when that handful controls the lion’s share of the market). And our cattle industry had shrunk considerably, losing more than half of all cattle farms and ranches and about 9.5 million mother cows.
The allocation of the consumer beef dollar had also changed by 2021. Whereas a generation ago the cattle farmer and rancher was allocated 63 cents and the packer and retailer shared 37 cents, now it was the packer and retailer who shared 63 cents and the cattle farmer and rancher received only 37 cents.
What was once a competitive allocation of each consumer beef dollar had now been flipped on its head. For consumers, the spread between the farm–gate price of cattle and consumer beef prices jumped from 88 cents per pound only a generation ago to $4.58 per pound in 2021.
###
R-CALF USA’s weekly opinion/commentary educates and informs both consumers and producers about timely issues important to the U.S. cattle and sheep industries and rural America.
Ranchers Cattlemen Action Legal Fund United Stockgrowers of America (R-CALF USA) is the largest producer-only trade association in the United States. It is a national, nonprofit organization dedicated to ensuring the continued profitability and viability of the U.S. cattle and sheep industries. For more information, visit www.r-calfusa.com or call 406-252-2516.