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August 14, 2025
Will High Beef Prices Spoil Grocers’ Meat Opportunity?
With beef prices expected to remain elevated for several years, grocers may need to explore fresh ways to bring value to their meat departments.
According to the latest consumer price index published by the Bureau of Labor Statistics, average ground beef prices averaged $6.34 per pound and uncooked beef steaks reached $11.88 per pound in July. Both reached record highs, ratcheting up in price by 12.2% and 9.4% year-over-year, respectively.
The higher prices are expected to stick around for a while, as Canadian and American beef herds have shrunk to the lowest levels in decades. From 2016–2020, drought conditions, high feed costs, and overall lean profitability led many ranchers to send more cows to slaughter.
Profits margins in the beef business have also been squeezed by meatpacking plant closings, pandemic disruptions that slowed meat processing operations, high interest rates, and broader inflation, particularly labor costs, in recent years. Tariffs are further expected to put pressure on foreign producers to raise prices — with the top sources of imported beef coming from Australia, Canada, Mexico, New Zealand, and Brazil.
Demand for Beef Remains High, Despite Soaring Prices
Despite rising prices, there’s still plenty of demand for beef. The USDA estimates consumption this year will be up slightly from 2024.
Grass conditions have improved and ranchers are beginning to rebuild their herds to take advantage of the high prices, but supply relief won’t happen overnight. If a rancher decides to keep a calf born this spring, raising a calf to slaughter typically takes 14 to 20 months, with grass-fed cows taking even longer to mature.
“It might be at least two to three years before we would see any significant change on the supply side that would ultimately lead to some moderation in beef prices,” agricultural economist Derrell Peel told Newsweek.
“We’re going to be in a tight supply situation, in an elevated price situation for the next two to three years,” Derrell Peel, an agricultural economics professor at Oklahoma State University, told CBS News, “probably to the rest of the decade.”
Walmart Makes a Move to Cut Out the Middleman
To try to keep a lid on prices, Walmart recently opened its first beef facility in Kansas, cutting out the middleman. The facility will process and distribute beef to 600 Midwest stores. Walmart U.S. EVP John Laney said in a statement, “This is the first case-ready facility fully owned and operated by Walmart, and that milestone ensures we’re able to bring more consistency, more transparency and more value to our customers.”
McDonald’s last fall sued multiple meat companies on accusations they colluded to inflate the price of beef.
Continuing high beef prices could reopen an opportunity for plant-based meats. A study from researchers at Martin Luther University Halle-Wittenberg found people prefer meat alternatives — if they are significantly cheaper than real meat.
Grocers may increasingly emphasize less-expensive meat options such as chicken or pork, and lesser-known cuts of beef, if the price of the latter meat continues to remain inflated.
An article published by the Food Institute notes that rising beef prices are also causing restaurants to reduce portion sizes, rotate in lower-cost cuts, or introduce blended menu items — in conjunction with raising prices.
Discussion Questions
How should grocers be responding to rising costs for beef?
What opportunities do you see for grocers to reassort their meat departments?
Poll
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Mohamed Amer, PhD
CEO & Strategic Board Advisor, Strategy Doctor
Brad Halverson
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David Biernbaum
Founder & President, David Biernbaum & Associates LLC
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While elevated prices may dampen beef sales and encourage some consumers to trade down to other proteins such as chicken, I don’t foresee a dramatic decline in beef consumption. Burgers and steaks are still a staple part of the national diet. Some of the current supply–demand imbalance, which is driving price increases, may also ease after the summer, when beef consumption typically moderates.
I wish this thread could decide what it wants to focus on: is it negatives (inflation, drought) or is it (a never made clear) “opportunity”? And the titular question seems to be answered, right after the sub-head: “The USDA estimates consumption this year will be up slightly from 2024.” So there.
This all seems rather routine: if prices rise slightly, then consumer behavior isn’t likely to be affected much; if they soar. then consumers will shift heavily to cheaper alternatives.
I’m not sure what else anyone can add. The opportunities would seem to be driven by the higher prices, not spoiled by them.Cost-saving measures can be implemented by grocery retailers, such as optimizing their supply chain logistics to reduce transportation costs. Additionally, they can minimize waste through better inventory management and by offering discounts on soon-to-expire products. In addition, it is possible that grocers will explore alternative protein sources for a greater variety of products and to mitigate the effects of the increase in the price of beef.
Two added reference points also impacting pricing and supply – the US govt continues to allow meat industry consolidation, with the big four packers now processing 80%+ of the meat in the United States. Second, imported beef at cheaper prices have doubled since 2010 to over 4.6 billion pounds, mostly because the US government has encouraged trade deals into the US at zero to low tariffs, thus pressing down on independent American ranchers. Hopefully the government will work more effectively to support and incent American ranchers to compete successfully at home, thus increasing supply options.
For grocery stores, some lessons from the 2008-2010 (economic crash) period were that cheaper cuts of meat instantly became more popular because of price pressures. So grocers should be providing more alternative cuts at deals for grilling, as well as chicken and pork. Consumers want their proteins!
The glass is half-full here. The high beef prices aren’t spoiling grocers’ meat opportunities—they’re forcing a long-overdue evolution of their protein portfolios. Savvy retailers should stop viewing this as a crisis and start treating it as competitive differentiation.
The winning strategy has two tracks: vertical integration, where feasible (kudos to Walmart’s Kansas facility), and cultural repositioning everywhere else. For most grocers, the real opportunity isn’t cutting out middlemen—it’s cultural jujitsu. Preserve beef’s ritualistic status while positioning protein diversity as sophisticated choice architecture. Create intentional protein destination zones by rotating weekly premium cuts across proteins or offering complete meal solutions with a daily featured protein. Create the context and presentation to make non-beef proteins enjoyable beyond the pricing lever.
A sustained $11.88/pound price for steaks will accomplish what decades of marketing couldn’t—permitting consumers to explore beyond beef monoculture. The retailers who master this transition won’t just survive commodity cycles; they’ll emerge as protein destinations with deeper customer relationships and diversified category strength.
You’re on to an important point here. With increased consumption of protein/meat comes an increased interest around flavors, prep, and versatility. No one wants to eat NY steaks every week at $25-$29/lb, many are unable to afford it. It’s incumbent on grocers and the knowledgable meat team to merchandise with versatility, variety, and value, educating customers in the process. Shoppers will return loyalty to the grocers who take the extra steps, and create an experience.
No discussion of the farm and meatpacking labor force being decimated by deportations?
Poultry & egg prices on the rise due to bird flu (and the head-in-sand response by the current government) also giving room for beef to rise as well? And the virus has already been found in cattle, so what happens when it starts killing herds?
Great points.
There’s a lot at play in the meat business that’s driving up costs; I don’t need to rehash what others have written eloquently about here.
As long as the pricing pressures affect the entire market, and so far that’s certainly the case, the play for grocers is to be ready when consumers trade down to cheaper cuts or other types of meat, or to frozen product that’s typically less expensive and has a better shelf life. This means carefully monitoring demand at the SKU level in their meat department. Looking at historical data to understand when high demand for meat is happening and being ready to support that demand by positioning inventory in their cold chain to react to changes. I specifically call out the cold chain to emphasize that this is a product with a shelf life. While the lead time from supplier to meat case is short, the lead time for suppliers to have product ready for processing isn’t, nor is it flexible. We learned this during COVID when chicken and eggs were tough to find.
The bottom line, ensure assortments are broad and that you’ve got a demand plan in place to monitor and react quickly to emerging trends. It will be critical to have a credible assortment of proteins available across price points and in the right quantities to maximize turns and mitigate outages on one side and overstocks on the other. This product has a short shelf life, making precise planning critical.