The beef market is entering a difficult phase as rising production costs combine with shrinking herd sizes, driving up prices for consumers worldwide. In the UK, Europe and the US, the squeeze on both farmers and shoppers is intensifying.
Several key factors are behind the trend:
- Herd reductions and supply constraints: In the US, cattle slaughter is around 6.5% lower than last year as drought, high feed costs and smaller herd sizes cut availability. Similar trends are seen in Europe and the UK, where national herds have been falling by roughly 3% a year for the past decade.
- Rising costs for producers: Labour, energy and feed expenses have all climbed steeply, with dry weather reducing pasture yields and forcing more costly feeding regimes. Even at higher market prices, many farmers say margins remain tight.
- Global ripple effects: Countries such as Brazil, Australia and New Zealand are stepping into the gap left by falling production elsewhere — Brazil’s beef export turnover rose by about 52% year-on-year in June, driven by both higher prices and volumes.
- Persistent demand: Despite price hikes, demand has remained firm in many markets, sustaining cattle and carcass values. Analysts warn, however, that rebuilding supply will take years given the long production cycle for beef cattle.
In the UK, farm-gate prices have nearly doubled in a decade — from roughly £3.60 per kg to about £6.50 – £7.00 per kg — yet the sector remains under strain. Post-Brexit subsidy changes and high input costs have eroded confidence, and many farmers are reluctant to expand herds despite strong prices. For consumers, the result is clear: packs of mince and other beef cuts have become markedly more expensive, feeding directly into wider food inflation.
Unless global supply recovers or demand softens, beef inflation looks set to persist. The combination of cost pressure, long production lead times and structural challenges suggests this is not a short-term spike but a longer-term adjustment in the beef market.
Sources:
Sky News: Shrinking herds and rising costs: The beef market is in turmoil…
Food Navigator: Beef prices up globally: How will meat companies fare?
