While You Pay More For Beef - Farmers Get Less
Beef prices are at record highs. Farmers are getting crushed.
And somehow - both can be true at the same time.
This makes no sense. And it's kind of driving me crazy. Let me explain.
You've likely seen the news reports - beef prices have gone off like a runaway freight train.
Our Ribeye Steaks now cost over $40.
It's something I deal with everyday as we work to keep prices for our customers and members reasonable while still making sure that our farmer partners get what they deserve. (And let's be real - $40 for one steak is not reasonable. It’s reality.)
But behind every expensive ribeye is something that most people never see. The actual cost of raising cattle has become brutally high, and it is pushing family farms to the edge.
In fact, the economics of beef farming - always tough to begin with - no longer make any sense at all.
Look at this chart of feeder cattle prices over the past few years.
In 2020, prices were roughly 130 to 140 per hundredweight. Manageable. Normal. The kind of pricing that allowed beef to stay on the dinner table without breaking wallets. Fast forward to today and we are looking at 340 to 400. Nearly triple what it was just a few years ago. The chart looks less like a steady climb and more like a rocket.
You would think that means ranchers are finally making money. Higher cattle prices should mean higher profit.
Prices tripled.
Profit didn’t.
That’s the problem.
Why Higher Cattle Prices Are Not Helping Farmers
In theory, rising cattle prices should be a blessing. But costs have not just increased, they have exploded.
• Feed costs are up sharply
• Fuel and trucking are expensive and volatile
• Land prices and property taxes are rising
• Processing costs are high due to limited capacity
• Interest rates make financing painful
The cattle cycle is broken. The old cycle was simple: high prices encouraged herd expansion, expansion increased supply, prices eventually eased. Today, herds are not rebuilding. Drought wiped out cattle numbers. Many ranchers sold off. Older farmers are retiring. Younger ones are not replacing them because the math no longer works.
You raise a steer for 18 to 24 months and hope the numbers pencil out. Lately, they often do not.
Higher consumer beef prices do not mean the farmer is winning. The farmer is frequently the one getting squeezed the hardest.
Consumers Pay More. Farmers Still Struggle
Food prices go up. Families complain about $25 steaks. But somehow, the people raising the animals are not the ones benefiting. The spread between farm price and retail price keeps widening. Most of the margin gets absorbed after the farm gate: at the processor, distributor, or retailer level.
Take a look at how much of the cost of beef goes to the farmer today versus in 1980:
In 1980, a farmer got roughly 60 cents of every retail beef dollar.
Today? More like 39.
Beef got expensive. The farmer didn’t get paid.
Four massive processing companies control most of American beef. When consolidation becomes that extreme, power flows upward. Terms are set from the top. Small and mid sized producers have very little leverage.
When four companies control the supply chain, ranchers don’t negotiate - they accept what they’re offered.
So we end up in a strange situation:
Beef is more expensive than ever
Feeder cattle are at record highs
Family farms are still fighting to survive
It should not work like this, but right now it does.
This video brings it home - this is not theoretical - it's about real beef farmers - real farm families - losing their farms.
The Core Problem: Beef Economics No Longer Make Sense
There is no gentle way to say it. The economics of beef farming are broken. Not because demand is weak. Demand is strong. The problem is the structure between the farm and the customer.
Three hard truths:
Costs on the ranch have far outpaced revenue
Processing is bottlenecked and controlled by a few players
Most value is captured after the animal leaves the farm
If nothing changes, we will wake up someday and discover that real, small farm beef is gone. All we will have left is industrial beef, imported or raised cheaply at scale with priorities that do not include animal welfare or quality.
That is not the future most families want for their dinner table.
Beef shouldn’t be a luxury food.
And raising cattle shouldn’t be a financial suicide mission.
Direct to consumer farms, local and regional processing, and subscription based buying are not trends. They are the foundation of a new model that can make American beef sustainable again.
When customers buy directly, more dollars stay with the people doing the work. Farms survive. Quality stays high. The food system becomes more resilient and more honest.
This is not about going backward. It is about taking the best of tradition and pairing it with a smarter, more modern supply chain.
Real beef from real farmers. Transparent, traceable, raised with care. That is the path forward.
Stay on the current path and nothing improves.
Build something better and everyone wins.
