Beef prices reach record highs due to drought conditions, lower herd sizes

The number of cattle in the U.S. recently reached its lowest point since the 1950's and the cost of raising cows has increased, leading to record-high prices for some beef products.

According to the U.S. Bureau of Labor Statistics, the average retail price of 100% ground beef was $6.32 per pound in September — the highest price recorded in the bureau's available data, going back to 1984.

John Diamond is the Director of the Center for Tax and Budget Policy at Rice University's Baker Institute for Public Policy. He said drought conditions have driven up the prices for grain, fertilizer and other products needed to raise cows.

"If you’re a rancher, you’re facing really high costs," he said.

Diamond said the drought could also have long-term effects.

"The size of the herd and the weight of the herd will generally be smaller a year or two after a drought occurs," he said.

Tariffs have also contributed to increased costs, Diamond said, and ranchers have been unable to grow their herds with imported live cattle from Mexico, due to a screwworm outbreak.

The Trump administration has promised to quadruple Argentine beef imports to lower beef prices.

Diamond said that policy could hurt American ranchers.

"U.S. producers would still be facing all of the cost hurdles that they face currently," he said. "That policy would kind of act contrary to what the administration has been saying is their reason for imposing tariffs."