Buying Back into the Beef Market Proves Challenging for Ranchers

Who is Cashing In and Who is Cashing Out?

American beef is the gold standard. Which may be why we consumers continue to pay record high prices for the protein option.  If you haven’t done a price comparison lately, prime cuts of beef are currently selling for $17.62 a pound, while pork chops come in at $7.13 per pound and chicken breast slightly higher at $8.55 per pound. Data suggests that we are nearing a 200% price increase on beef since 1997. But, the beef industry continues to maintain a standard of quality and flavor that shoppers, for now, find valuable enough to continue purchasing.

The question is, are cattle ranchers getting rich off of these record prices? The answer is a bit more complex than a simple yes or no. 

What is Influencing Cattle Ranching Profits?

It’s true, the average sale price for cattle at auction in 2020 was $1.51 per pound. In May of 2025 that average rose to $4.05 per pound. However, producers are not pocketing the price increase as profit. A percentage of cattle ranchers are still working to recover from the blows they endured between 2019 and 2021. There are still bills to pay off and financial buffers to rebuild.  

While ranchers are earning more per unit, operational expenses are not declining at a rate to turn all of that extra money into profit. The gap between feed, fuel, labor costs and auction sale price points is narrow enough to keep producers cautious in their decision making. Despite higher levels of precipitation on areas of grazing land than recent years, ranches are still maxing out grass usage and requiring supplemental feed. That can come in the form of purchasing feed or buying more land. Land is still largely unavailable or out of feasible price ranges for cattle producers. Ranchers are still choosing between absorbing feed costs or downsizing their herds.

The dynamic is certainly not without opportunity.  Squaring debts and going into retirement is a realistic option. Some producers are choosing to liquidate while prices are high.  Others are hoping the price point will last long enough to begin the process of rebuilding back herds. They have expansion on the mind.

Are Cattle Producers Liquidating?

Considering the cost of a ribeye these days there is plenty of discussion about why cattle producers are not expanding their herds.  Let’s remember, growing a cattle herd is about a three year process for ranchers as they make the decision to hold back heifers, breed them, account for the gestational period and then raise calves to the point where they can be bred for the sake of increasing the number of cows sent to market. So far, there's little indication of a rebuild suggesting producers are not feeling comfortable enough to make any dramatic inventory shifts.

Let’s also remember that the average age of a cattle producer is 58-60 years old, nearing retirement age. Meanwhile, fewer and fewer young people view cattle ranching as a lucrative career choice. What decisions are aging cattle producers making in regards to their herds, their land and their income? Can they afford to take a risk or at the very least, navigate the ebbs and flows of another five years in the cattle business?

Some are looking ahead at a three year herd build back plan and seeing potential risk. While it has been surprising to see consumers consistently willing to pay high prices for cuts of beef, they can’t rise indefinitely without pushback. At some point the price point will over shoot the value. By keeping supplies tight they could eventually price themselves out of the market. 

Perhaps the current dynamic is the retirement plan. Better to sell while beef prices and land prices are high. Liquidating cows, equipment and acreage is a cash out option for producers who are not sure they can navigate the financial pressures of market swings. A lot can change in a year, but the effects of those changes can last much longer. There is something predictable about closing up shop while you are ahead.

Are Any Cattle Ranches Expanding?

Other producers are splitting the difference by selling off the money making cows and keeping the land. Rather than absorb high operating costs associated with raising beef, these producers are renting pastures out for grazing to produce a reliable income rather than bank on beef as the primary income producer. With inventories their lowest since the 1970s and warnings that demand will eventually ebb if prices stay high a partial liquidation strategy threads the needle. Selling cows to pay the bills and putting money aside to buy back into the market when the time is right could relieve short term financial pressure for producers. 

However, even younger cattle ranching families who have expansion goals are finding it difficult to buy back into the market after downsizing herd numbers. For one, land sales have been low. Land is not abundantly available suggesting that a large percentage of producers are aiming to ride the wave of high priced beef a little bit longer; if they can. The question is, which of those producers will be able to afford to begin building back herds without a big risk of liquidating next year should beef prices drop and expenses remain the same?

Beef prices are projected to stay high into 2026.  Will one more year create the financial buffer producers need to set themselves up for a less risky attempt and increasing cattle inventories? Or, are we on the brink of a mass liquidation process where a majority of cattle ranchers cash in on the $4.05 per pound sale average and step into retirement?  The great changing of the guard could bring land prices down but that alone is not a guarantee of supply growth and there are still questions about who the next generation of beef producers will be and what their operations will look like.