Is the Bull Market Over for Cows?

Meat-eating consumers have experienced sky-high beef prices at their local grocery stores and steakhouses. After several years of drought, the US cattle herd is the smallest it has been in more than seven decades. At the same time, tariffs have added costs to many beef imports, yet consumers still want their burgers for barbecue season. As a result, cows have been selling like hotcakes for months. However, a recent dip in cattle and beef prices suggests there is a limit to how high the market can go.

Cows Dip in Price

Mid-June futures markets for both live and feeder cattle showed signs of deterioration, as did fresh beef prices. Military conflict in the Middle East may have caused stock market jitters to spill over into the livestock market, and war anxieties could influence consumers to cut back on beef in favor of cheaper chicken or pork options. Low plant capacity has fueled a premium for cattlemen, and a rumored plant closure could tighten capacity and undermine cow prices. Still, many signs suggest beef prices are not going to plummet and will likely continue to rise over the long term.

The price of cows has been so high that many ranchers are selling young replacement heifers for beef that they would normally hold back for breeding. It takes 18-24 months to grow a newborn calf into a slaughter-ready steer or cow. High prices for slaughter markets can lure ranchers to revise breeding programs downward to take advantage of short-term market highs, but this bodes poorly for consumers in the longer term. Overall, the US herd size will continue to shrink.

If summertime drought threatens beef-producing regions, it could also soften market prices for cows because producers will sell animals to avoid high feed costs and poor grazing conditions. However, despite the recent heat wave, most ranchers in the South and Southwest have experienced drought relief in 2025, allowing them to keep back animals if desired.

Cattle Market Ups and Downs

High prices prompt farmers to sell cows while the market is favorable, much like any stock owner may liquidate stock shares when the market peaks. If some cattle owners become anxious that prices are softening, they may jump to sell more cows quickly while prices remain historically high. This is especially true for older farmers who may decide a market peak is a prime time to sell up and retire rather than commit more resources to long-term herd growth, especially when farming inputs, such as fertilizer, equipment, land, and feed, remain inflated post-COVID. The average US farmer is now older than age 58; more than 63% of agricultural workers were over 55 in 2022.

This could explain recent price dips, at least in part: As ranchers sell cows, supply increases, and processors and feedlot owners can be more selective. Yet the converse is also true: If prices drop, many cow owners will be more likely to keep back breeding stock for a better day to come, tightening supplies and driving up what processors and consumers must pay to meet steady demand. Summertime is the peak of the pricing year for beef lovers, and processing plants must maintain profitability by keeping their facilities running at capacity.

Low cattle prices may entice new entrants to the cow market or those seeking to expand their cattle operations to purchase cows for the future. Adding to this complexity, milk prices have been dropping steadily, motivating many dairy farmers to breed dairy cows with beef breeds to bear feeder calves for the meat markets.

Cheeseburgers Still Beloved

Meanwhile, consumers can have a significant impact on cow markets because if they stop buying, the entire supply chain is impacted. So far, Americans are not significantly cutting back. Polls of favorite foods consistently rank hamburgers (especially those with cheese) and steaks at the top. Beef prices have increased by 11% over the last year, with May marking the highest cost for retail ground beef in US history.

After years of slandering red meat as bad for the heart, health trends now indicate more beef is better, especially if grass-fed. Keto and carnivore diets have grown in popularity, while most vegetarians give up the effort after a short time. If America’s ranchers can grow the nation’s cattle numbers, its diners appear ready to pay the premium.

The United States imports and exports beef. It mostly imports lean beef trimmings and exports high-end steaks. Thus, foreign markets could also impact long-term beef prices. If foreign economies decline, this could hurt US beef producers’ profit margins by reducing overseas demand for filet mignon, and cheap foreign cows could undercut US markets. However, Mexican cattle are currently banned from import due to fears of screwworms, and foreign beef producers are unlikely to conquer the US market anytime soon.

The current pause in cattle prices likely does not signal a bubble bursting, as cow prices are strongly supported by long-term demand, reduced supply, and high agricultural input costs. These fundamental economic factors will likely persist. Hopefully, more young people will decide to become ranchers as profitability improves. America’s cheeseburger-loving diners are counting on it!