Derrell S. Peel, Oklahoma State University
Coming into the July 4 holiday, wholesale ground beef prices pushed to new record levels. Prices for 90 percent lean trimmings, which are the backbone of ground beef markets, have increased continually the past three years (Figure 1 above). Decreased cow slaughter, down 5.8 percent year over year in 2023 and another 15.4 percent decrease in 2024, has been followed by a further 11.9 percent year over year decline in the first 23 weeks of 2025. This has resulted in a more than 18 percent drop in nonfed beef production from the cyclical peak in 2022 to 2024 and an additional decrease of 8.9 percent thus far in 2025. The 90 percent lean trimmings price the last week of June was $401.45 cwt., a record high and the first time 90s prices have exceeded $400/cwt.
Typical ground beef formulations use various combinations of lean and fatty trimmings to achieve desired ratios of lean:fat in hamburger. Not only have 90 percent trimmings continued to increase in price, but 50 percent trimmings have also jumped sharply in recent weeks due to declining fed beef production (Figure 2 below). In the second quarter, fed steer and heifer slaughter decreased 6.0 percent year over year based on eleven weeks of data since the first of April. This has led to a 3.9 percent year-over-year decrease in fed beef production since April, with reduced supplies of 50 percent lean trimmings. By the last week of June, the price of 50 percent trimmings jumped to $236.03/cwt., the highest price ever except for two weeks during packing plant reductions during the pandemic in May of 2020. Fed beef production dropped just 1.6 percent from the all-time high in 2022 to 2024 but the recent decrease in fed beef production is expected to continue through 2025 and 2026 at least.
A mix of 90 percent and 50 percent trimmings in a 7:1 ratio produces an 85 percent ground beef product. Using the end of June prices for 90s and 50s reported above results in a price of $380.77/cwt. for a wholesale 85 percent lean combination, an all-time record high price.
Wholesale ground beef prices have continued to push higher despite increased imports of processing beef, with moderate declining domestic nonfed beef supplies. Ground beef prices will remain high for the foreseeable future as cull cow numbers will remain tight while the cattle industry transitions to herd rebuilding.
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