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As of March 2025, beef prices in the United States are experiencing significant increases, driven by a combination of supply constraints and robust demand.
Supply Constraints
The U.S. cattle inventory has declined to its lowest level since 1951, with 86.7 million head reported as of January 1, 2025, marking a 1% decrease from the previous year.
Chronicle This reduction is attributed to factors such as drought conditions and elevated feed costs, which have led ranchers to reduce herd sizes. Additionally, the discovery of the New World Screwworm in Mexican cattle prompted a temporary halt in imports from Mexico, a significant supplier to the U.S., further tightening domestic cattle supplies.
Demand Dynamics
Despite higher prices, consumer demand for beef remains strong. The all-fresh retail beef price for January 2025 was $8.15 per pound, up 4.3% year-over-year.
CattleRange This resilience in demand is supporting elevated price levels across various beef products.
Price Outlook
Industry forecasts suggest that cattle prices will remain at record highs throughout 2025. CattleFax projects average prices for steer calves to be between $3.30 and $3.40 per pound, up from $3.10 in the previous year. Yearling steers are expected to average around $270 per hundredweight, compared to $248 last year. Fed cattle prices are anticipated to average $198, up from $186 in the prior year.
Industry Challenges
The beef industry faces ongoing challenges, including high input costs and environmental factors. Drought conditions have not only reduced grazing availability but also increased reliance on expensive feed, further straining producers. Additionally, potential trade policies, such as proposed tariffs by the U.S. administration, could impact beef imports and exports, adding uncertainty to the market.
In summary, the convergence of reduced cattle inventories, sustained consumer demand, and external economic factors is expected to keep beef prices elevated throughout 2025. Both producers and consumers will need to navigate this challenging landscape as the year progresses.
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