US beef prices have soared but farmers aren't making more money

Image source, AFP via Getty ImagesBySam FenwickBusiness reporter, BBC NewsPublished6 August 2026, 00:23 BSTWith US beef prices soaring to record highs, you might think that South Dakota cattle rancher Eric Gropper would be celebrating.

Yet while the cost of the meat in US supermarkets is now 12% higher, external than it was a year ago, a rise more than three times the rate of general inflation, Gropper says that he and all the other beef farmers aren't making any more profit than usual.

The BBC World Service's Follow the Money series spent a week tracing the American beef supply chain to find out what has caused the price jump and discover where all the cash is going.

Eric Gropper has about 350 breeding cows on around 8,000 acres of grassland in south-west South Dakota. Most of it he leases from the Pine Ridge Indian Reservation.

He is seven miles from the nearest paved road, and two and a half hours' drive from the closest town of any size.

Gropper doesn't set the price for his calves. Instead once a year he takes them to a livestock auction where buyers place bids and the hammer decides.

Right now the bids are the highest he has ever seen - around $2,500 (£1,883) for a 600lb (272kg) calf, up from $2,000 two years ago.

These record prices are driven by a simple fact – there are not enough cattle. Due to a combination of drought in many states, and disease pressure, at the start of this year the US had fewer cattle than at any point since 1951., external

Gropper is experiencing drought first hand, as the 13 natural wells across his land that provide ground water for his cattle have run dry. He has to use a water tanker instead.

Due to the national shortage of cattle, Gropper is getting record prices for his. But unfortunately his costs have equally climbed to new highs.

A new pick-up truck that once cost $40,000 now runs to $100,000. A wooden fence post has gone from about $6 to as much as $19. A quarter-mile roll of barbed wire has doubled, from $60 to $130. Everything he uses day to day, he says, has jumped in price since the Covid pandemic.

And with little grass on parched fields – well over 60% of US cattle are now grazing on drought-hit land - farms like his are having to buy in hay, silage and other fodder for their cattle.