Industry Economic Impact

High Beef Prices, Tariffs, Imports and Tough Trade-Offs 🥩 📈 It's no surprise that beef prices are at record highs. The prolonged drought of 2022 accelerated herd liquidation during the contraction phase of the cattle cycle. As a result, the U.S. cattle herd 🐂 is the smallest it has been since the early 1950s 📉. Rebuilding takes time. Cattle require about nine months for gestation and another 18 to 24 months to reach market weight. The cattle cycle itself unfolds over 8 to 12 years, and we are now near the bottom of that cycle. Add strong consumer demand (Americans still love their 🍔 and 🥩 even at today’s prices) and the result is tight supplies and very high beef prices 📈. Tariffs are adding to inflationary pressure, especially on ground beef, which relies on imported lean trimmings to meet demand (roughly half of the beef we consume is ground product). The president’s proposal to increase imports from Argentina (among other related comments) has drawn sharp criticism from the U.S. beef industry, and it’s not hard to see why. Additional imports might offer short-term relief for consumers (although I am not convinced Argentina can supply enough beef), but they could distort market signals that encourage ranchers to rebuild their herds. Without those incentives (high producer prices and profitability💰), domestic recovery may take even longer, keeping beef prices elevated for consumers. There is no quick or easy fix. High beef prices reflect, in part, a biological and economic cycle that takes years to unfold. Sustainable price relief depends on expanding domestic production, which takes time. For now, balancing consumer affordability with the interests of America’s beef industry remains a tough challenge -- one that tariffs or imports alone cannot solve. #FoodEconomics #FoodPrices #FoodPolicy #BeefPrices #Beef #TradePolicy #Tariffs #BeefImports

Live cattle futures have surged to record highs, now approaching $240/cwt, underscoring persistent cost pressures in the US food supply chain. Why it matters: - Beef is a major component of consumer food baskets, and its price trajectory often feeds directly into grocery bills. - Even as headline CPI has shown signs of easing, underlying pressures in protein markets are keeping food inflation sticky. - Rising input costs — feed, transportation, and labor — are amplifying the squeeze, leaving households with little relief at the checkout counter. Historically, sharp increases in livestock prices tend to lag into CPI food inflation by several months, suggesting that despite Fed progress in cooling aggregate inflation, consumers may still face upside surprises in the months ahead. This highlights a broader truth: inflation is rarely uniform. While energy and some goods have cooled, services, shelter, and food remain resilient, complicating the Fed’s path toward its 2% target. The question is less about whether inflation is falling in aggregate — and more about which categories continue to bite hardest for households. For now, beef is leading the charge upward. There are several historical parallels that this can be compared to. Source: Barchart

Kenya normally exports about 130 tonnes of meat to the Middle East every day. Translated into livestock numbers, that represents roughly 850–870 Kenyan cattle slaughtered daily for export markets. The Daily Nation reported that the disruption is costing the sector a KSh 1.2 billion per month The Kenya Meat and Livestock Exporters Council had reported a loss of Ksh 1 Billion for the initial 5 days With the current disruption in Gulf trade following the escalation of the Iran–Israel conflict, that export pipeline has effectively paused and the ripple effects are now travelling all the way back through the livestock value chain. Two weeks ago I wrote that Kenya's meat export ambition appeared to be running slightly ahead of its production foundations. The current disruption is now offering a very practical illustration of what that looks like in reality. Industry estimates suggest Kenya exports between 125 and 130 tonnes of meat per day into the Middle East, with roughly 60% flowing into the UAE and the remainder across Saudi Arabia, Kuwait, Bahrain and Oman — chilled as air cargo and frozen by sea freight, both of which have been affected. So what's the potential impact to the beef value chain? Export processors operate on tight working capital cycles. Livestock is purchased, animals are slaughtered and processed quickly, and revenue is recovered once shipments are delivered and buyers settle invoices. When exports stop suddenly, that cycle breaks. For exporters it becomes a logistics and cashflow problem. For producers and traders further up the chain, it can quickly become something more serious — animals delivered shortly before shipments paused may now sit inside a payment chain that has been unexpectedly stretched. Anyone who has worked in livestock supply chains knows that when export payments stall, the pressure moves upstream very quickly. In a livestock economy where many producers operate with very thin liquidity, even a short disruption in that payment cycle can place serious strain on pastoralists, traders and finishing operations supplying the export plants. What moments like this highlight is that export markets are inherently exposed to forces well outside the control of farmers, processors or governments. Long-term resilience still rests on something more fundamental: a production system robust enough to sustain both a strong domestic market and competitive export channels. Kenya's domestic red meat market already exceeds $5 billion and the country remains structurally undersupplied. If those foundations are in place, exports become a powerful additional outlet. Without them, disruptions like this don't simply cost revenue, they expose how fragile the underlying system still is. As is often the case in export trade - now focused on livestock: the shock rarely stops at the airport cold room. It travels all the way back to the producer who raised the animal.

The 2026 is going to be a defining year for beef! So, I’m writing a 5 part series breaking down the biggest supply and demand forces that will drive beef economics in 2026, and what they actually mean for the people writing the checks across the chain. 🔹 Part 1 (today): Domestic supply. The cattle cycle is still the cattle cycle. We are selling through inventory faster than we can rebuild it. Weights can cushion the drop, but they cannot solve it. That supports cattle prices, but it also increases margin volatility and makes “being wrong” more expensive. 🔹 Part 2: Global trade. Imports can cap the grind, exports can reprice the carcass, and a single policy headline can swing flows faster than the fundamentals. 🔹 Part 3: Consumer demand. Beef wins on preference, but budgets decide the mix. The battleground becomes ground beef, value cuts, and channel shifts. 🔹 Part 4: Government intervention. Trade rules, nutrition guidance, assistance programs, labeling, animal health. In 2026, policy is not background noise. It is a price input. 🔹 Part 5: Putting it all together. Scenarios, signposts, and the dashboard I’d watch every week to stay ahead of the market. If you want to understand 2026, you do not need more hot takes. You need a clean framework that connects cattle numbers, trade flows, the consumer wallet, and Washington’s hands on the scale. Part 1 is live now. Part 2 is next.

There were many things I wanted to get done today, but instead, I fell down the cattle market rabbit hole. Hours later, I'm intrigued by unique market anomalies. Everyone says this is "normal" cyclical market behavior, and doubling down on imports will save the domestic cattle market. I'm not buying it. International dynamics are transforming the U.S. cattle market. During the pandemic, primary packers posted record profits—JBS Foods saw a 70% increase to $4.4 billion by March 2022, and Tyson Foods surged 91% to $4.1 billion. However, these gains didn't strengthen the domestic supply chain. Instead, the U.S. beef cow herd fell to 28.2 million head by January 2024, its lowest level since 1962, while total farm debt surpassed $535 billion with interest rates topping 8%. Global market realignment exposes cracks in the U.S. beef industry's reliance on international trade. The strong U.S. dollar has made American primal cuts less competitive in Asian markets, while Australian exporters have gained ground through trade agreements. Brazilian and Australian trim imports have suppressed domestic prices, eroding carcass values and squeezing packer profitability. These disruptions have forced packers to reconsider domestic production. The belief that imports are essential isn't holding up in current global markets. The industry's low heifer retention rate of 39.7% in October 2024 highlights the shortsighted focus on short-term gains over long-term stability. As packers face a dysfunctional business model due to record-high cattle prices and reduced export competitiveness, the value of a stable domestic supply chain is emerging. Rebuilding the U.S. cattle herd requires balancing rancher economic sustainability through innovative financial mechanisms, investments in domestic processing, and protective trade policies. A strong domestic cattle industry serves both ranchers and packers. High cattle prices should be seen as an investment in resilience rather than a threat. The industry must recognize that valuing domestic production as a strategic asset is critical to creating a regenerating and resilient beef market capable of weathering global disruptions.

Why does the beef entrée on your banquet menu cost so much more than it did two years ago—and what should you expect next when deciding whether beef belongs on your event menu? Record-high cattle prices, the smallest U.S. beef herd in decades, and shifting global trade flows have pushed beef prices to historic levels. Consumers feel it at the grocery store in the sticker price on burgers and steaks, but for hotels, caterers, convention centers, and event planners buying beef by the case, the stakes are even higher. Every carving station, plated filet, and burger buffet now carries a price tag shaped by forces that start on a cattle ranch and travel through feedlots, packers, and distributors before landing on your BEO. On this episode of Eating at a Meeting Podcast LIVE, I’m joined by Dr. Derrell Peel , Charles Breedlove Professor of Agribusiness at Oklahoma State University and Extension Livestock Marketing Specialist since 1989. One of the country’s most trusted voices on cattle markets, beef demand, and meat supply chains, Derrell has spent more than three decades helping producers and buyers make sense of the economics behind every pound of beef—and he has a gift for making complex market dynamics clear to non‑economists. Together, we’re tracing the path from farm to function: how tight cattle supplies and strong demand have driven prices to current levels, how North American and global trade flows shape what U.S. buyers pay, and how those upstream dynamics translate into the B2B prices hotels, caterers, and studios see on invoices every week. You’ll learn: ▶ Why cattle supplies are historically tight, and why herd rebuilding—and price relief—will take years, not months ▶ How beef moves from cow‑calf producer to packer to distributor to your banquet menu, and where the key price “steps” happen ▶ Why grocery‑store beef prices and B2B foodservice prices don’t move in lockstep ▶ Which cuts are under the most pressure, and how that should inform menu design, portion strategy, protein mix, and whether beef stays on the menu at all ▶ What planners and F&B buyers can realistically expect for beef pricing over the next few years—and how to plan, negotiate, and communicate with clients accordingly Whether you’re a planner justifying a per‑plate increase to a client, a hotel F&B director building next year’s banquet menus, or a caterer deciding whether beef stays on the buffet, this conversation gives you the market literacy to make smarter decisions—because every meal matters, and every menu line item has a story that starts long before it reaches the kitchen. Join us live and bring your questions about beef prices, menu strategy, and managing F&B budgets in a volatile protein market.