Tom Winter started his hamburger food truck in Missoula, Mont., almost two years ago, focused on selling locally produced food to local people at a price they could afford.
As the business — Gary’s Local Burgers — expanded to three locations, Mr. Winter kept the price of his burgers steady, at $6, a number he posted on huge signs.
But last month he printed new signs with a new figure: $6.95.
Ground beef was at its highest average price on record in May at $5.98 a pound, according to the Bureau of Labor Statistics. That cost was 16.2 percent higher than 12 months earlier. Other cuts of beef, including sirloin steaks and chuck roast, also reached record highs in the first half of 2025.
Even though he’s buying beef and selling hamburgers locally, Mr. Winter could not escape a market that has become more expensive to operate in. Prices are up because the number of cattle available for beef is at its lowest level since the 1950s.
The number of beef cattle in the United States is down to 27.9 million, a 13 percent decline since 2019, and the overall cattle inventory is the lowest it has been since 1952, according to the Agriculture Department. Consumer demand has remained steady in recent years.
“I pledged personally that we would keep them at $6, and I was forced to go back on my pledge and increase it by 95 cents,” Mr. Winter said of his burgers, adding, “We just did not understand that prices would do this.”
Most ranchers run small businesses and do not have the capital for large investments or to weather fluctuations in price. The average beef herd consists of 47 cattle, according to 2022 Agriculture Department data. Large cattle farms — with 100 or more bovines — make up 10.5 percent of all beef operations.
Smaller herds are the result of a decade-long cattle cycle that includes drought, processor closings and shifting consumer preferences.
Ranchers reported strong profits in 2014, and expanded their herds over the next five to six years, said Ted Schroeder, an agricultural economics professor at Kansas State University.
But with more supply, the price that ranchers received for cattle fell, just as a drought began across the Western United States. With less grass for their cattle to graze on, ranchers had to buy more feed for their herds to subsist on, raising their costs. As the drought persisted, many ranchers decided to sell some cattle and downsize their herd.
Meatpacking plant closings meant fewer processors needed cattle, depressing the price that ranchers received. Pandemic disruptions in 2020 had slowed down meat processing operations, and raised costs for the entire industry.
Now, ranchers are beginning to rebuild their herds to take advantage of the high prices. But it is a slow process — it takes two to three years to raise a calf to slaughter — so beef prices are likely to remain costly for the foreseeable future. The Agriculture Department estimates that the price for cattle will remain high into 2026, with retail beef prices remaining elevated for several years.
Businesses that buy large quantities of beef are responding in a number of ways. McDonald’s, Sysco and other companies and rancher groups have sued big meat processors, arguing they have colluded to drive up prices. Meat processors have denied the claims, but settled some suits for tens of millions of dollars, without admitting wrongdoing.
Grocers like Costco and Walmart are becoming more involved in the entire chain of meat production. Walmart has invested in a Nebraska slaughterhouse, and on Monday opened its first owned and operated meat packaging facility in Olathe, Kan. A Walmart spokeswoman said the new facility would help ensure a consistent supply of beef to its stores.
Still, what is bad for consumers at store checkout counters is good for cattle ranchers, with some thriving after years of treading water. “Lately, it has been really positive for the livestock,” said Blake Albers, founder of Albers Craft Meats in Norfolk, Neb.
The Albers family owns a huge cattle feeding operation — the end of the line for cattle — and operates a small facility that flavors, cuts and packages beef, which it sells at its storefront and online. Mr. Albers said his store was still seeing a steady stream of customers, but had made some changes to retain customers’ business despite rising costs.
Some patrons want smaller portion sizes to save money, he said, adding that it is difficult to provide a smaller steak that is still thick and attractive. The butcher shop has increased the size of some cuts, such as rib-eye, so buyers can portion it to their desired size at home for multiple meals.
Mr. Albers said he was also selling 10 pounds of individually packaged, high-quality meat at a discount, figuring he can accept a lower margin on larger orders. And if a customer buys a lot of steak, he’ll throw in some ground beef at a lower price.
“You need to be in the sevens on premium ground beef, but we can go to $5.09 and $5.99 if we bundle it with the animal,” he said.
While beef prices are up, consumer income has risen slightly, meaning some people can absorb higher burger costs.
But not everybody can, and that keeps Mr. Winter, the owner of Gary’s Local Burger, up at night. His prices were at parity with McDonald’s, he said, adding that in a city where the cost of living is rising, he has been happy to see residents eating Montana beef from his trucks.
That’s why it was tough to raise prices. “Many of my staff kind of mocked me, saying, ‘It is 95 cents, dude, who cares?’” he said. “But it was not a direction I wanted to go.”
Kevin Draper is a business correspondent covering the agriculture industry. He can be reached at [email protected] or [email protected].
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