Beef prices have soared 13.9% the past year. Yet Americans can’t get enough of the red meat.

The hikes can be explained by relentless demand and tight supply, with total US cattle inventory at a 75-year low.

Beef and veal costs overall were up 2.7% between July and August, government inflation data out Thursday showed. Uncooked ground beef prices have risen 12.8% since August 2024, while uncooked beef steaks have spiked 16.6%, hitting an average of $12.22 a pound.

Even with high prices, consumer demand for beef has been “remarkably resilient,” said Mario Ortez, an agribusiness and entrepreneurship professor at Virginia Tech. After all, there’s something of a protein boom afoot in the US, with many Americans taking weight-loss drugs that lead them to eat less and pursue protein-rich meals.

So far, “higher prices in the store haven’t stopped the large majority of beef buyers,” Ortez said.

Read more: August CPI breakdown: Consumers feel the heat of accelerating inflation

Brian Earnest, the lead animal protein economist at CoBank’s Knowledge Exchange research division, said in a report last month that high demand may be a key driver of record-high beef prices. Consumers today have access to far higher-quality beef at the grocery store than they did just a few decades ago, and they’re taking advantage: Retail per capita beef consumption could be 60 pounds this year, Earnest said.

“I don’t see anything really kind of slowing down this exceptional demand of animal protein in general,” Earnest told Yahoo Finance.

As for why the supply of cattle is severely constrained, ranchers are being incentivized to quickly sell their product to capitalize on high prices, Ortez said. There are also fewer reasons to hang on to cattle, with droughts making it more difficult to feed animals affordably and high interest rates keeping ranchers from accessing the capital to rebuild their herds.

Ortez said a rancher in Texas this week told him they would love to grow their herd, but “the water is not there, the feed prices are high, and the interest rates are so high, so I can’t.”

“Call it a perfect storm,” Ortez said.

During the pandemic, when there weren’t enough workers in meatpacking plants, a backlog of cattle built up on feedlots waiting to be slaughtered “to the tune of about a million head of cattle that the processors had to work through,” Earnest said.

But those backlogged cattle are long gone, and ranchers are now “clamoring everywhere to get cattle to fill the feed yards and fill these processing plants."

For ranchers, it takes a while to restore cattle herds. Even if ranchers want to produce more beef and plan to retain their female offspring as a result, those cows may take two years to produce offspring of their own, which would then take 18 to 24 months to be harvested, Ortez said.

As for whether the US could bring in more foreign beef to alleviate its supply shortage, importers already purchase a significant amount from Brazil, Australia, Canada, New Zealand, and Mexico, despite being the world’s largest producer.

“Typically, the United States is actually a net importer of beef,” Earnest said, with the US exporting beef products like organ meat and tongue and importing lean meat for mixed ground beef.

Between May 2024 and May of this year, US net beef imports totaled more than 2.4 billion pounds, Earnest said in his report.

Tariffs could complicate that picture. Brazil, for example, has been hit with 50% tariffs by President Trump, on top of existing levies. Those are expected to limit imports from the country, which could push prices for ground beef even higher.

Read more: How Trump's tariffs affect your money

The majority of imported cattle, meanwhile, comes from Canada and Mexico. But an outbreak of New World screwworm, a flesh-eating parasite infecting cattle in Central America, has halted imports across the southern border.

Still, Earnest said cattle from Mexico represent a small share of what is slaughtered for meat in the US. The impact is more heavily felt among southern ranchers who are struggling with tight supply.

Amid all of these factors, expect higher beef prices to stick around for a while.

“In the short term, they’ll remain elevated, and we’re probably headed higher into next year,” Earnest said.

Emma Ockerman is a reporter covering the economy and labor for Yahoo Finance. You can reach her at emma.ockerman@yahooinc.com.

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