Cattle shortage keeps U.S. beef prices high as meatpacking capacity shrinks

Four meatpackers process about 85% of U.S. beef amid closures

After years of economic turmoil and droughts, the U.S. cattle herd has shrunk to its smallest level in 75 years. The Wall Street Journal reported that the supply shock has driven steak and hamburger prices at grocery stores and restaurants to record highs while the $100 billion beef industry contracts. Conditions could persist well into the next decade because replenishing a herd takes years. The shortage is causing meatpackers to lose billions because they cannot fully pass higher cattle costs to supermarkets and restaurants, and plant closures are permanently lowering U.S. processing capacity and leaving the industry less prepared for the day herds expand.

Tyson Foods was scrapping an Illinois slaughter facility, planning to sell a plant in Washington and had closed a Nebraska slaughterhouse earlier in the year. JBS closed a slaughter plant in Pennsylvania, while Cargill shut a ground-beef packaging facility in Wisconsin. Tyson Foods and JBS’s U.S. beef businesses are expected to lose more than $1 billion combined this year, and Tyson’s beef business is on track to lose money for four straight years. Tyson could slaughter about 28,000 cattle a day last year, roughly a quarter of all cattle killed in the United States. After closures and the planned Washington sale, that capacity is expected to fall to about 18,000 a day. Four companies — Tyson, Cargill, JBS and National Beef — process about 85% of America’s beef.

Meatpackers are fighting to make money wherever they can to avoid closing more facilities. When a slaughter plant closes, it hardly ever reopens, leaving total U.S. processing capacity permanently lower for years to come, analysts said. Building new plants is complicated and costly: they require specialized wastewater treatment, environmental permitting and a large labor force, and the handful built in recent years are smaller. Don Close, a senior beef industry analyst with Terrain, an agriculture market research firm, said, “It is so difficult to get that capacity back once it closes.” He added, “Further contraction is one of the biggest long-term threats the industry has.”

Higher cattle prices can motivate ranchers to rebuild their herds, but high costs, rising trucking rates and fears that cheap imports will undercut them are slowing that process. Industry analysts estimated that ranchers are making about $1,000 profit per head of cattle this year, their highest profits in years, while meatpackers are losing about $100 per animal. It takes roughly 18 to 22 months to grow beef cattle to market weight. Chickens are ready for slaughter in six weeks, and hogs in about six months.

Oklahoma State University agricultural economics professor Derrell Peel said, “We still have a long way to go before we have any increase in numbers and we’re going to get tighter before we get better,” adding, “The high prices are ahead of us yet.” Brad Peek, whose family has run one of the largest livestock auctions west of the Rockies for decades, said, “The common public probably thinks you can turn it around in four months,” adding, “We’ll be lucky to start gaining cattle in four years.”

In 2020, the Covid-19 pandemic forced meatpackers to temporarily shut plants as tens of thousands of employees who worked shoulder to shoulder fell sick. Daily capacity at U.S. cattle and hog facilities temporarily declined by as much as 45%, according to the USDA. Meatpackers then struggled for a year to recruit enough workers to run their plants at full capacity.

With less processing capacity, cattle prices plummeted. Ranchers held cattle longer in hopes their value would rise, adding costs and pushing them deeper into debt. The industry leveled out in 2022 as plant staffing rebounded, but ranchers’ costs continued to worsen as inflation raised prices for fuel, feed and equipment. A massive drought that year dried grazing pastures from Montana to Oklahoma.

Greg Williams, a fourth-generation rancher in northern California, sold hundreds of cows during the drought because his pastures did not have enough hay. “We just were really short on feed and really thin in the pocketbook,” Williams said. “We just had to take our lump on that one.” Lines at sale barns swelled across the country as ranchers rushed to sell cattle to reduce the number of animals they had to feed. By January, the U.S. herd had reached its lowest level in seven decades.

Tom Donati, a fourth-generation rancher in California’s Sacramento Valley, runs an annual auction where hundreds of ranchers gather to look at breeding bulls. Bulls are the cornerstone of a rancher’s herd, and with cattle in short supply, their prices have risen to record levels. Ranchers travel to auctions across the country to find suitable animals. On a blistering September morning, ranchers arrived and scouted cattle for the right fit. They were served lunches of Tri-Tip roasts — a triangular cut of beef popular in California — along with an open bar.

The average price of a bull at Donati’s sale was $13,601, the highest it had been, up from $10,482 the previous year and $7,874 in 2024. Donati said he was concerned that prices were too high. “It feels like a bubble that will eventually pop if cattle prices decline, meatpacking capacity falls too low or consumer demand wanes,” he said. Ranchers who borrowed to buy expensive bulls would be in trouble under those conditions, he said. “I hope things don’t get out of hand.”

In Eagle Mountain, Utah, maintenance worker Austin Campbell was checking his email in August for an update on a promotion when he instead found a message from Donnie King, Tyson’s chief executive at the time, announcing the closure of the Utah facility where Campbell worked. King wrote, “Our beef business is operating in a challenging environment due to the historic cattle shortage,” and added, “These supply constraints are likely to persist.”

The $300 million Utah plant was only five years old. It did not slaughter cattle; state-of-the-art automation helped employees cut and package steaks, roasts and ground beef for grocery stores. Tyson offered Campbell a job at a different facility after laying him off. Campbell declined because he wanted a role with more stability and later found work with a company building data centers in the region. “I don’t think I would ever return to the industry,” he said.

Eagle Mountain is a frontier city at the base of several mountain ranges, about an hour southwest of Salt Lake City. Open land and the original pony express trail separate its newly constructed neighborhoods. Investors founded the town 30 years ago after buying its land at a bankruptcy auction. Its population has doubled since the pandemic to about 80,000, and the city remains mostly residential.

City officials said the Tyson Foods plant, built in 2021, brought hundreds of daytime workers to what had been a quiet bedroom community. The plant created local demand that attracted gas stations, fast-food outlets and grocery stores, and it brought new employees to the city, including Campbell. It employed more than 700 people and accounted for about 15% of Eagle Mountain’s jobs. “I was shocked,” Mayor Jared Gray said. “There’ve been plants that have been open for 50 years across the country, so why would they not close those and keep something that’s a little more current?”

Plant closures are also changing rancher economics by leaving fewer buyers and longer shipping routes. BJ Weber, a sixth-generation farmer and feedlot owner, sold about 90% of his cattle for years to Tyson’s now-closed Illinois beef plant, which was seven miles away. Weber said the price paid to cattlemen by meatpackers dropped roughly $300 per head after the closure. He is now trucking cattle longer distances to smaller meat plants in Michigan, Missouri and Iowa. “You don’t know how good it was until it’s gone,” he said. About 75% to 80% of the cattle in Weber’s feedyard came from ranchers in the American Southeast.

Craig Hammond is one of those ranchers. Hammond, who has about 800 cows in Glade Spring, Virginia, called the loss of Tyson’s Illinois plant and JBS’s Pennsylvania plant a major blow to his region. “They’re not going to pay nearly as much for our cattle,” Hammond said. “It’s devastating.” Trucking costs are rising as cattle travel farther, reducing the available truck supply and raising rates. Ranchers who lack confidence that they can earn enough are unlikely to build up their herds, prolonging the shortage.

Trump administration officials have searched for ways to lower beef prices. The administration has tried funding smaller meatpackers to boost competition, probing meat companies for price-fixing with the Justice Department and calling grocery executives before the Fourth of July to ask about their beef prices. Imports were one solution on which the administration focused.

The United States has long imported only small amounts of beef from countries such as Brazil and Australia, where cattle feed on grass for longer periods before slaughter, producing meat that is leaner and less flavorful than grain-fed American beef. Blended together, it is well suited for the 80/20 lean-to-fat ratio used in ground beef ideal for hamburgers. Imports have represented between 10% and 15% of overall U.S. beef supply over the past decade, rising with demand for fast-food burgers. The USDA now estimates that imports will reach a record 20% of U.S. beef supply this year.

In late August, Brazilian billionaire Joesley Batista, who shares control of JBS, the world’s largest meatpacker, met with Trump in the Oval Office to discuss how additional beef from Brazil could lower U.S. beef prices, The Wall Street Journal reported. Trump would have had to drop a 26% import tax to do so. The next day, Trump announced on social media a plan to temporarily allow 300,000 metric tons of beef imports into the United States, which the president said would be sold at a 25% discount to market prices. There was little sign that the imports had lowered prices. The American Farm Bureau Federation, the largest farmer trade group, said Trump’s plan had done little to lower prices across the country apart from a few cents at some grocery stores.

Meatpackers are trying to squeeze all the value they can from cattle. At Cargill’s plant in Schuyler, Nebraska, managers and supervisors train processing-line workers to scrape every ounce of meat from bones. Supervisors conduct daily audits with tablets to measure yields, while real-time performance boards show teams their targets. Jarrod Gillig, who leads Cargill’s North America beef business, called extracting more meat “the greatest lever we can pull right now.”

Cargill also has been working more closely with its cattle suppliers. About 200 miles from Schuyler, Jason Anderson and his family have operated a feedlot in Arapahoe, Nebraska, for almost 100 years. Several truckloads of their roughly 18-month-old cattle will soon be shipped to Schuyler for slaughter. Anderson exclusively sells his cattle to Cargill, shipping about 450,000 annually from the 31 feedlots he owns. The arrangement provides certainty about his income, while Cargill sends him data about the animals’ quality and suggests changes that can make the meat tastier for consumers and the carcasses more valuable to him.

Anderson remains concerned about losing consumers as beef prices rise and about foreign companies continuing to try to import more beef into the United States, which could undercut cattlemen like him. “We have this bull’s-eye now,” Anderson said. “The price is so high that anywhere globally in the world, they want to send their meat into this.”

The Wall Street Journal reported that interviews with ranchers, meatpackers and policymakers revealed “a fractured supply chain with few good answers.” All sides fear that record prices for products such as rib-eye and meatloaf could drive consumers away and weaken demand. Higher cattle costs squeeze meatpackers, closures reduce processing capacity, and the industry enters any future herd recovery with less room to handle additional cattle.