Ground Beef Price Analysis - May 2025
Summary
Ground beef prices reached a new record high of $5.98 per pound in May 2025, representing a 16.2% increase from the same period last year. The current price surge is driven by multiple converging factors including drought conditions, rising feed costs, high interest rates, and tight cattle supplies from cyclical herd contraction.
Current Price Trends
May 2025 Performance
- Current Price: $5.981 per pound
- Monthly Change: +3.1% from April 2025 ($5.801)
- Annual Change: +16.2% from May 2024 ($5.148)
- 6-Month Change: +6.3% from November 2024
Recent Price Trajectory
The data shows accelerating price increases throughout 2025:
- January 2025: $5.545
- February 2025: $5.625 (+1.4%)
- March 2025: $5.790 (+2.9%)
- April 2025: $5.801 (+0.2%)
- May 2025: $5.981 (+3.1%)
Key Factors Driving Price Increases
Supply-Side Pressures
Cattle Herd Contraction
Farm-level cattle prices were 13.5 percent higher in April 2025 than April 2024, as a result of tight cattle supplies from a cyclical contraction of the cattle herd. Farm-level cattle prices are predicted to increase 12.6 percent in 2025.
Drought and Feed Costs
Drought conditions continue to impact pastures in cattle regions, which can force producers to spend more on feed. Drought, rising grain prices and high interest rates have made cattle farming more costly.
High Interest Rates Impact
High interest rates mean producers are paying more for operating loans, which many rely on to run their businesses. Higher food costs, elevated interest rates—crucial for the capital-intensive cattle industry—and downsizing herds have collectively pushed prices to record levels.
Economic and Policy Factors
Inflation and Input Costs
Inflation drove up input costs, which haven't receded, making it expensive all around to care for livestock. Factors that contribute to inflation across the economy—including interest rates, energy prices, labor market tightness, and consumer demand—also influence food prices.
Trade Policy Uncertainty
Now, tariffs add new pressure on prices. With tariffs in place, the situation just got more complicated. This was a surprising announcement, as many of us were expecting the ongoing trade disputes and recently implement tariffs by the Trump Administration to impact prices last month.
Market Outlook and Predictions
Short-Term Projections
Beef and veal prices are predicted to increase in 2025 due to tight supplies and continued consumer demand. Beef and veal prices are predicted to increase 6.6 percent in 2025, with a prediction interval of 1.5 to 12.1 percent.
Long-Term Expectations
Beef prices are likely to remain high until mid to late 2025, possibly even longer. Looking ahead, consumers should prepare for elevated beef prices through 2025 and possibly into 2026.
Historical Context
Long-Term Inflation Trends
Between 1943 and 2025: Ground beef experienced an average inflation rate of 3.75% per year. Compared to the overall inflation rate of 3.62% during this same period, inflation for ground beef was higher.
Recent Volatility
The current price of $5.981 represents significant volatility compared to pre-pandemic levels. The price of beef, specifically sirloin and ground beef, stayed relatively consistent since the U.S. Bureau of Labor Statistics started tracking it in the 1980s — that is until the summer of 2020.
Consumer Impact and Market Response
Demand Patterns
Signs indicate that demand for beef isn't flagging, and it'll likely pick up as warm weather invites more people to fire up a grill. However, The average American consumes 82 pounds of beef per year, compared to the global average of 19.8 pounds.
Consumer Adaptation
The price surge in 2015 led to the closure of many butcher shops as consumers sought more affordable protein alternatives. As history has shown, when prices spook consumers, new habits form.
Comparative Analysis
| Time Period | Price | Change |
|---|---|---|
| May 2024 | $5.148 | Base |
| May 2025 | $5.981 | +16.2% |
| 12-Month Peak | $5.981 | Current |
| Historical Average (1943-2025) | 3.75% annual inflation | Above average |
Key Insight: The current 16.2% annual increase significantly exceeds the historical average inflation rate of 3.75% for ground beef, indicating exceptional market stress.
Conclusion
Ground beef prices in May 2025 reflect a convergence of structural and cyclical factors creating unprecedented upward pressure. All of that means it's more expensive now to maintain a farm, let alone start or expand one — two avenues that would help increase the supply of beef and bring down prices at the store. With continued supply constraints and robust demand, prices are expected to remain elevated through 2025 and potentially into 2026, fundamentally altering consumer purchasing patterns and market dynamics in the beef sector.