Strengthening Our Regional Food System Amid Rising Beef Prices, Tariffs, and International Trade
Understanding the Current Beef Market
Beef prices are soaring across the United States, and Kentucky is no exception. Several factors are driving these increases, including historically low cattle inventories, rising input costs, and tariffs on imported beef. The U.S. cattle inventory is at its lowest point in 73 years, with only 87.2 million head as of January 2024—a 2% decline compared to the previous year. This contraction in supply is largely due to drought conditions and high costs compelling farmers to sell female cattle for slaughter rather than keeping them for breeding.
Adding to the complexity is the ongoing hypercycle in the cattle market, which has led to record prices. The feedback loop of high prices and reduced breeding stock has prolonged the contraction phase of this cycle, leaving fewer cattle available for production. As a result, consumers are facing higher prices at grocery stores and restaurants.
The Role of Imports and Tariffs
To meet domestic demand amid dwindling production, beef imports are set to increase significantly in 2025. The U.S. imported nearly 4.4 billion pounds of beef in 2024, an 18-19% rise from the previous year. However, tariffs on imported beef—such as the 25% tariff imposed on imports from Canada and Mexico—are exacerbating price hikes across the supply chain. These tariffs aim to protect U.S. cattle ranchers but inadvertently raise costs for consumers and processors alike.
On the global stage, U.S. beef exports have declined due to increased competition from Australian beef and economic challenges among trade partners. This shift underscores the need for a more resilient domestic food system that can weather international market fluctuations.
Challenges for Producers
For farmers and ranchers, rebuilding herds is an uphill battle. High interest rates have increased borrowing costs by 43%, making herd expansion financially daunting. Additionally, while feed prices have dropped slightly due to improved weather conditions and record corn production, these reductions are insufficient to offset other rising expenses.
Despite these challenges, domestic demand for beef remains robust. Consumers continue purchasing beef despite record-high retail prices averaging $8.01 per pound in late 2024. However, per capita beef consumption is projected to decline slightly in 2024 due to affordability concern.
Strengthening Regional Food Systems
Given these dynamics, it’s clear that both consumers and producers must prioritize strengthening regional food systems. A robust local food network can mitigate reliance on volatile global markets and reduce transportation costs associated with imports and exports.
At Mt. Folly, we are committed to addressing these challenges head-on by offering our beef raised sustainably here in Kentucky. By choosing Mt. Folly’s beef, you’re not only supporting local agriculture but also contributing to a more resilient food system that benefits both producers and consumers.
Conclusion
The rising cost of beef highlights vulnerabilities in our current food supply chain—vulnerabilities that can be addressed through regional solutions. As we navigate this period of high prices and tight supplies, strengthening local food systems becomes more critical than ever.
By feeding your family regionally produced beef like Mt. Folly’s products, we can create a sustainable path forward that supports farmers, gives shoppers healthier protein options, and fosters a thriving agricultural economy in Kentucky.
Let’s work together to build a stronger future for our food system—one that champions local production and ensures access to quality beef for generations to come.
https://www.fb.org/market-intel/u-s-cattle-inventory-smallest-in-73-years
https://www.fb.org/market-intel/cattle-on-feed-falling-in-hypercycle
https://www.brownfieldagnews.com/news/beef-imports-likely-to-increase-in-2025/
Listen to Ben Pasley speak to FOX56 journalist Jace O'Barto below. Read news article by clicking here.
