Ground Beef Hits Record $6.67 As US Cattle Herd Shrinks To 1951 Levels

At the start of 2026, inflation has largely faded from the front of investors' minds.

The annual inflation rate slipped to 2.4% in January, while core inflation — which excludes food and energy — slowed to 2.5%, the lowest since March 2021.

But beneath the broader disinflation trend, one item is moving sharply in the opposite direction.

Beef.

The average price of ground beef in the U.S. has climbed to a record $6.67 per pound.

Prices are up 20.5% over the past 12 months — the fastest annual increase since 2018 — and up roughly 72% since January 2020, when ground beef averaged about $3.88 per pound.

So why is beef inflation accelerating while the rest of the basket cools?

A Historic Cattle Shortage

In a post shared Wednesday, the Kobeissi Letter highlighted the core issue: supply.

U.S. cattle and calves inventory has fallen to roughly 85 million head — the lowest level since 1951, according to USDA data.

That's down approximately 45 million from the 1975 peak of around 130 million and nearly 10 million fewer head than in 2020.

As herd sizes shrink, prices rise. Beef and veal prices increased 15% year-over-year in January, among the fastest gains across the food basket.

By comparison, chicken prices rose just 1.1%, while milk prices were roughly unchanged.

Even if ranchers begin expanding herds today, new supply would not meaningfully reach grocery shelves until 2028 at the earliest due to biological production lags.

Cattle cycles move slowly — and the current contraction is one of the deepest in decades.

USDA: Tight Supply, Strong Demand

At its Agricultural Outlook Forum in Arlington, Virginia, the U.S. Department of Agriculture (USDA) projected livestock prices will remain firm in 2026.

Total red meat and poultry production is forecast to reach 108.4 billion pounds in 2026, up 1% from 2025.

However, beef production is expected to decline again next year, with growth in pork, broilers and turkey offsetting the drop.

The 5-area steer price for 2026 is forecast to average $240 per cwt, up 7% from 2025 levels, supported by strong consumer demand and constrained cattle supplies.

Feed prices, meanwhile, are expected to fall further in 2026 as large corn crops and higher soybean crush volumes push down input costs.

Stocks To Watch: Beef And Veal Exposure

Investors looking for exposure to the beef cycle may consider major publicly traded meat processors.

Tyson Foods Inc. (NYSE:TSN) has significant U.S. beef operations alongside pork and chicken. It remains the most liquid large-cap U.S. proxy for cattle pricing.

JBS N.V. (NYSE:JBS) is the world's largest meat processor with extensive U.S. beef exposure. It offers high sensitivity to global cattle dynamics.

Marfrig Global Foods S.A. (OTC:MBRFY) controls National Beef in the U.S. and carries meaningful beef leverage.

Minerva S.A. (OTC:MRVSY) focuses on fresh and frozen beef exports and provides high beta exposure to global beef pricing.

Image via Shutterstock/ BearFotos