08/25/2026
Beef, it’s what for dinner or is it ?
A number of friends have commented on the high beef prices we are all seeing and disparaging Trump for easing tariffs on foreign beef to bring prices down for consumers. Beef production is a complicated process given the time required to respond to markets signals due to inherent lags (keep and raise a heifer to breeding age -12-16 months), gestation (9 months) and then her calf to feed out (15 months etc) .. all while weather, foreign wars affecting energy costs, government policies (domestic & foreign) effect input costs faced by producers. So beef priced today are based on decisions producers faced 2-3 three years ago!
To understand where we are today and Trump’s response, we have to understand the factors (controllable and uncontrollable) of the past that have positioned our beef industry today.
First, the drought of 2021 onward forced the culling decision. Severe, multi-year drought across the Southern Plains and Southwest — the heart of U.S. cattle country — destroyed pasture conditions starting in 2021 (Biden years). When grass disappears, a rancher has two choices: pay to feed cattle another way, or sell them. That’s the fork in the road every cow-calf operator faced. We saw a 6% reduction in our nations beef herd (adult cows).
Energy and input costs made “pay to feed them” the losing option. This is where policy enters the picture. Diesel prices rose 63% year-over-year at one point and hit $5.72/gallon by mid-2022 — up 74% from a year earlier. Remember the Biden “war on fossil fuels”- I do. Nitrogen fertilizer, made from natural gas, hit an all-time record in April 2022 (Biden). These are exactly the two inputs a rancher needs to substitute for lost pasture: diesel to haul in hay and water, fertilizer to grow more forage. When both spike simultaneously, the “hold the herd through the drought” option becomes financially unworkable for far more operators.
The leasing data suggests policy, not just global markets, shaped that cost environment. Critics of “it was all COVID and Ukraine” point to a concrete, non-rhetorical number: federal oil and gas leasing fell to about 126,000 acres in Biden’s first 19 months, versus 4.4 million acres in the same window under Trump’s first term — a roughly 97% drop. …..a 97% drop!!!!
Since new leases (the acreage vs the number of permits) are the precursor to future production, this represents a multi-year contraction of the future domestic energy supply pipeline, independent of any single geopolitical shock. That’s a policy lever, not a global accident - that occurred under Biden.
So the herd liquidation was steepest in 2021-2023 — beef cows fell from 30.7M to 28.9M, roughly 6% in two years — precisely the years diesel and fertilizer costs were at their peak. Given the well-documented 2-3 year lag between herd shrinkage and retail beef prices, that liquidation is landing on grocery shelves right now, in 2025-2026, as record beef prices.
The through-line: drought reduced the free option (grazing); energy policy — layered on top of global supply shocks — raised the cost of the paid alternative (hauled feed and fertilizer-grown hay); together they tipped the economics toward culling rather than holding, and that culling is why beef costs what it does today.
So, we understand and support Trump’s beef tariff relaxation.
