Overall, the U.S. agricultural sector is facing tough economic times, a combination of persistently high input prices and a stagnant at best export outlook, both of which have been exacerbated at least in part by the constantly changing array of tariffs that the Trump administration has imposed on most of our trading partners over the past several months. Much of the pain is being experienced by crop producers, whose total cash receipts are forecast to decline by 2.5 percent between 2024 and 2025 by USDA’s Economic Research Service, the third straight such decline since 2022. In addition, cash expenses for farmers overall continue to increase at a robust rate, at a more than 7 percent clip per year since 2020.
On the other hand, the U.S. livestock sector is doing relatively well, especially the cattle and beef complex. Cash receipts for the sector are forecast to increase by more than 11 percent between 2024 and 2025.
For beef cattle in particular, the current strong prices are largely a result of a low cattle inventory (94.2 million head as of July 2025), the lowest level since USDA began tracking this figure since 1973. This supply problem has been caused by a number of market-driving factors that had been building up over recent years, including:
• A significant drought in the Southwest United States, causing cattle ranchers in that region to draw down their herd numbers,
• High input prices, and
• Low profitability for U.S. beef cattle operations in previous years.
In the spring of 2025, an announcement by Secretary of Agriculture Brooke Rollins added another wrinkle to the short beef supply picture in the United States. As a result of the discovery of New World Screwworm cases (NWS) affecting cattle in Nueva Laredo, Mexico only 700 miles from the U.S.-Mexico border, she suspended live cattle shipments from Mexico to the United States as a precautionary step to avert exposure of U.S. cattle to this flesh-eating pest. In September 2025, a new case was detected in Mexico only 70 miles from the border.
The ban on live Mexican cattle imports, if kept in place indefinitely, will put likely further upward pressure on U.S. cattle and beef prices, as these imports represent about 4.5 percent of all cattle marketed in the United States in a typical year. While USDA is investing considerable funds in establishing a new sterile fly facility in Texas to combat NWS through biological control techniques, it is expected to take 2-3 years to construct. In the meantime, they are funding expansion of the existing facilities established in Central America.
As a result of all of these supply-side factors, retail beef prices in the United States are up substantially this year across the board. An additional supply side factor driving ground beef prices is the higher price of imported beef trimmings from countries like Brazil and Australia due to recently imposed higher tariffs, at 50 percent and 10 percent respectively. Total imports of this product account for about one-quarter of the ground beef consumed here. As of August 2025, the price of steak had increased by 16 percent since last year, and the price of ground beef had increased by 18 percent. These levels of price increases are well above the estimated U.S. inflation rate for food, which was 3.1 percent as of September, and 3.0 percent for the general inflation rate.
On October 22, 2025, Secretary Rollins announced a new plan to help address high U.S. beef prices, consisting mostly of trying to relieve producers’ regulatory burdens, boosting domestic livestock processing capacity by prioritizing loans and grants to this sector under Rural Development programs (similar to a program offered during the Biden administration), and exploring the potential of remote grading procedures that could be used by small and medium-sized processors.
In the same week, after a White House meeting with the President of Argentina, Javier Milei, President Trump announced that his administration would quadruple the quota amount for imports of Argentine beef, in an apparent effort to reduce U.S. beef prices. This announcement was greeted with skepticism or even outright hostility from most U.S. agricultural groups, because this action came right after the U.S. Treasury Department agreed to provide $40 billion in financial assistance to the government of Argentina, after which the country lowered its export taxes on soybeans to facilitate massive sales to China.
Due to the trade war between the U.S. and China, China had stopped purchasing U.S. soybeans as of last May, a market which in most years accounts for 50 percent or more of U.S. soybean exports. A temporary truce was reached in the trade war at the end of October, with China promising to resume its purchases of soybeans and other U.S. agricultural products such as grain sorghum over the next few years. It is too early to tell if that agreement will result in the resumption of normal trade flows between the two countries.
Most market analysts believe this enlarged Argentine beef quota will have at best a modest impact on the U.S. market, pointing out that even if the entire new quota were to be filled, the additional shipments from Argentina would amount to only 2.5 percent of the current U.S. beef supply.
As of early November, the U.S. drought monitor map shows that much of the southwest United States remains mired in a severe to extreme drought, so it seems unlikely that many cattle ranchers in that region will be looking to substantially rebuild their herds, at least in the short term.
