Climate Change Drives Up Beef Prices Amid Drought and Smaller Herds

Drought and climate change are driving up beef prices in the US, with ground beef reaching $6/lb and steaks approaching $11.50/lb, the highest in a decade. The issue is exacerbated by smaller cattle herds and drought conditions in key cattle-producing areas. Climate inflation is becoming a broader phenomenon, impacting the price of various commodities, including coffee.

Drought and climate change are significantly impacting beef prices in the United States, with ground beef reaching $6 per pound and steaks approaching $11.50 per pound, the highest levels in a decade [1]. The issue is exacerbated by smaller cattle herds and drought conditions in key cattle-producing areas. Climate inflation is becoming a broader phenomenon, impacting the price of various commodities, including coffee [1].

After years of drought, pastures have not been producing enough grass to feed cattle, leading ranchers to send their animals to the slaughterhouse earlier and cut back herds despite increased consumer demand for beef. This has resulted in record-high beef prices. The average ground beef prices in city supermarkets surpassed $6 per pound in June, while the cost of uncooked beef steaks approached $11.50 per pound [1].

The long-term impact of these conditions is that there is less ability to produce beef, as cattle herds have been dwindling for years. While some price hikes may be temporary, others, like beef prices, are expected to remain high for at least the next few years [1].

Tyson Foods Inc., a major meat producer, has seen its beef business face significant challenges due to these factors. Despite this, the company reported better-than-expected quarterly earnings on Monday, driven by increased demand for chicken and prepared foods [2]. Tyson Foods raised its annual revenue forecast, citing resilience in its chicken business, which has been growing while the beef business has been losing money [2].

The company expects beef slaughters to fall 16% in the first six months of 2025, with herd rebuilding expected to begin in earnest in 2026 [2]. The supply of beef may not improve until 2028, according to Tyson executives [2].

In conclusion, drought and climate change are having a profound impact on the beef industry in the United States, leading to higher prices and supply shortages. While some companies are adapting by focusing on other sectors, the broader effects of climate change on the food system are likely to continue.

References:
[1] https://www.bloomberg.com/news/articles/2025-08-05/burgers-and-steak-prices-are-skyrocketing-this-is-why
[2] https://www.morningstar.com/news/marketwatch/2025080495/tysons-chicken-business-is-growing-while-beef-is-losing-money-even-as-prices-jump