President Trump is looking to solve another problem – the rising cost of beef prices. He is solving the problem by getting rid of a tariff. Trump in a TruthSocial post said:
Beef prices have moved sharply higher mainly because the U.S. cattle herd has been shrinking for years, leaving fewer cattle available for beef production just as consumer demand has remained strong. USDA says the herd is now around its lowest level in roughly 75 years.
The latest numbers are striking. As of July 1, 2026, the U.S. had 94.2 million cattle and calves, but only 28.5 million beef cows, down another 1% from a year earlier. The 2026 calf crop is estimated at 32.5 million head, down 2%. On January 1, the total herd was just 86.2 million head—the seasonal January figure—and USDA says cattle inventories have contracted for seven consecutive years.
Why did the herd get so small?
A big part of it goes back to drought and high production costs. When pasture conditions deteriorated and feed became expensive, ranchers culled cows rather than maintaining or expanding their breeding herds. That increased beef supplies temporarily, but it also meant fewer cows producing calves in subsequent years.
There’s also a powerful cattle-cycle effect. When cattle prices rise, you’d expect ranchers to immediately produce more cattle—but they can’t. A rancher who decides to expand has to keep a young female instead of selling her, breed her, wait for the calf, and then wait for that calf to grow. USDA specifically notes that cattle cycles are unusually slow because of gestation and the time required to raise cattle to market weight.
Rebuilding the herd can initially make beef supplies even tighter. If ranchers retain more heifers as breeding animals, those animals don’t enter the beef supply. So fewer cattle go to slaughter today in order to produce more cattle several years from now.
And consumers haven’t backed away much. USDA says demand has remained strong despite higher prices.
The BLS tracks the average retail price per pound of hamburger/ground beef, and the latest data show a pretty substantial increase.
For July 2026, the U.S. averages were:
Those are actual average prices paid by consumers, not just a price index.
And the increase isn’t limited to hamburger. Beef roasts averaged $9.57/lb, up 14.0% from a year ago, while steaks averaged $13.06/lb, up 10.0%.
So the chain is basically:
Drought/high costs → ranchers reduce breeding herds → fewer cows → fewer calves → fewer slaughter-ready cattle → tight beef supply + strong demand → sharply higher cattle and beef prices.
There’s not yet much evidence of a meaningful herd recovery. July’s total cattle number was slightly higher, but beef cows were still down 1% and the calf crop was down 2%.
That’s why this probably isn’t a problem that disappears quickly. Even if ranchers aggressively rebuild now, the biology of cattle production means supply takes years—not months—to respond.
Back to Trumps solution
With the domestic issue still present, Trump’s TruthSocial post says there is a “commitment that the beef will be sold at 25% beow current market prices”. He does not say who this commitment is with, however.
Currently, there is a 26.4% ad valorem tariff on imported beef above a set quota. That is intended to protect domestic farmers. As a result, importers of beef pay 26.4% more for beef above the quota. One can assume that increased price is passed on to the consumer.
Now with the supply declining, it seems that the Trump administration will get rid of that charge for 300,000 metric tons.. Trump says that the commitment will be that the beef will be sold at 25% below current market prices. Now….maybe importers have explictly said that they would not raise prices by the 26.4% tariff. We do not know as Trump does not say that explicitly. However, if tarriffed beef is marked up 26.4% yesterday, and now the same imported beef does not have that tariff, one can assume that non-tariffed beef would now not have the tariffed markup. Prices come down by 25%.
So in effect, the tariff on imported beef raised prices by around 25%. Without the tariff, beef will be sold at the real price (around 25% less). Problem solved. Get rid of the tariff that raised the prices to consumers.
And we have been told by the likes of Treas Sec. Bessent, Commerce Sec Lutnick (and others like WH economic adviser Navarro), that tariffs are not passed onto the consumer…..
Time will tell if the domestic herd is rebuilt over time, but given the chain cycle, it might take more than the 3 months if the demand and supply remain out of balance for longer than that period simply because it takes time.
This article was written by Greg Michalowski at investinglive.com.