U.S. cattle producers are making “spotty” efforts to rebuild the nation’s diminished herd and supplies will remain tight, Tyson Foods Chief Financial Officer Curt Calaway said on Wednesday, as low inventories have pushed beef prices to record highs.
President Donald Trump has been considering potential executive actions to reduce tariffs on beef imports and regulations on producers as part of an attempt to lower domestic beef prices.
Although prices for eggs, milk, and other grocery staples have fallen since Trump took office in January 2025, beef is over 16% more expensive, making it a symbol of persistent inflation for American consumers as the summer backyard grilling season gets under way.
HIGH PRICES, DROUGHT WORRIES
Ranchers have been slow to retain female cows known as heifers for breeding, a critical step in rebuilding herds and increasing beef production, as cattle supplies dropped to a 75-year low in 2026. Instead, producers have sent animals to be slaughtered to take advantage of high prices and because of worries about dry weather limiting land available for grazing.
Cattle supplies will remain tight through 2026 and into 2027, Calaway said at a BMO investor conference in New York, adding that heifer retention was “spotty and regional.”
“We’ll still manage in a tight cattle supply,” he said.
Meatpackers have lost money in their beef businesses because soaring cattle costs have outpaced gains from higher beef prices. Tyson closed a beef plant in Nebraska this year and reduced operations at a Texas facility, laying off thousands of workers.
Beef prices climbed due to strong demand and as ranchers slashed their herds because drought hit grazing land in the western U.S. The Trump administration has also halted imports of Mexican cattle to keep out the New World screwworm parasite.
Tyson’s prepared foods business, which uses raw materials including beef and pork, has seen commodity inflation in seven of the past eight quarters, Calaway said.
Consumers have faced accelerating inflation amid the Iran war, with producer prices in April posting their biggest increase in four years.
“There’s a point where you reach a point where the consumer will back away based on pricing,” CEO Donnie King said.
“Inflation is real. It is persistent. We don’t see that going down in any kind of meaningful way.”
Source: Reuters
