Beef Is Now a Luxury—And It Won’t Get Cheaper Until 2028. Demand, Not Drought, Is the Real Culprit

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By: Christian Pierce

Shoppers are walking past the meat aisle in droves. Beef has shifted from a weekly staple to a luxury item, and prices won’t drop until 2028. That’s the stark forecast from the American Farm Bureau Federation, and the math behind it is harder to swallow than a dry steak.

Ground beef hit a record $6.90 per pound in April, nearly a dollar higher than last year, per Bureau of Labor Statistics data. Beef steaks averaged $12.80 per pound in May, up 16% year-over-year. Prices dipped slightly after April, but a return to $4 or $5 per pound is nowhere in sight. The USDA predicts beef prices will climb 10.1% in 2026, with inflation ranging from 2.8% to 18.3%. Cattle inventory is at a 75-year low, down 8.2 million animals (8.6%) from 2020, thanks to persistent drought, high interest rates, and rising production costs. But Kansas State University’s Glynn Tonsor says demand is the bigger driver. U.S. consumers are in a protein frenzy, fueled by new federal guidelines that prioritize protein in every meal. Vegan and vegetarian rates have halved since 2020—from 14% to 7% in 2025—pushing beef demand up for two straight years. To keep up, producers are getting more beef per cow, raising heavier animals, and importing 11% more beef from Argentina and Mexico this year. Then the war in Iran sent energy prices over $4 per gallon, where they’ll stay until at least 2027. Higher gas hits every step of production: cow feed, transportation, processing, and grocery store refrigeration. Fertilizer costs will rise too, lifting corn and feed prices, and slowing production growth even as demand stays high.

The commercial loop here is unforgiving. Demand keeps pulling prices up, but supply can’t catch up fast enough. Producers can’t expand herds as much as they’d like because high costs eat into profits. Importing more beef helps, but it’s not enough to offset the domestic supply gap. For the next two years, beef will remain a splurge item. Many households will cut back on portions, switch to cheaper proteins, or save beef for special occasions. The broader inflation backdrop—prices up over 4% for the first time since 2023, tomato costs soaring 40%, and more Americans going hungry—makes this squeeze even tighter. There’s no quick fix. Herds won’t recover to pre-drought levels until 2028, and demand shows no signs of cooling off.

Author bio: Christian Pierce, chief financial columnist and markets commentator, breaks down commodity trends and consumer economic shifts for top financial publications.