Consumer’s demand for beef — not just shrinking cattle numbers — is playing a central role in shaping prices and profitability across the U.S. beef supply chain, according to research from Kansas State University agricultural economists.
Brian Coffey, who co-authored a recent paper examining the U.S. retail beef market, says a microeconomic assessment shows consumer preferences have become a powerful driver of market outcomes, even during a period of historically tight supplies.
“A microeconomic assessment is really about using economic theory and models to help explain what we’re seeing in the real world,” Coffey says. “We make simplifying assumptions and apply economic frameworks to real data so we can isolate what’s driving changes in prices and quantities.”
In this case, Coffey and co-author Glynn Tonsor analyzed retail-level beef data from recent years to better understand how supply and demand interacted as the cattle industry moved through a major contraction. Their findings suggest demand has been stronger than many expected.
The current trajectory began in 2019, Coffey says, when the U.S. beef cow herd reached its most recent peak. Since then, drought, market conditions and other pressures have combined to trigger rapid herd liquidation.
“Since 2019, the number of beef cows in the U.S. has gotten smaller and smaller,” Coffey summarizes. “That’s been front and center when we think about the cattle and beef supply chain.”
By 2023, the industry was still firmly in a liquidation phase. Fewer cows meant fewer animals available for feeding, and cow slaughter also declined compared with 2022, creating another supply shock. Yet the total amount of beef available to consumers held steady.
The reason, Coffey explains, was innovation. Advances in genetics, feeding methods and technology allowed feedlots to finish cattle at heavier weights and produce larger carcasses with more high-quality beef. Imports of lean trim also played a key role, helping maintain ground beef supplies — a cornerstone of the U.S. market.
“As an industry, we really stepped up,” Coffey says. “We had fewer animals, but we were able to offset that with heavier weights and imports.”
The result was that total retail beef availability in 2024 was actually higher than in 2023, even though individual cuts varied in availability. Prices, however, moved higher.
“Between 2023 and 2024, we did see a price increase,” Coffey says. “That’s interesting because basic economics tells us that when supply goes up, prices usually go down. Instead, we had more beef, and people paid more for it.”
That divergence points directly to demand. Consumers, Coffey says, were willing to pay higher prices, signaling a stronger underlying value for beef.
Looking ahead, Coffey expects 2025 data to show a modest decline in retail beef supply — likely a few percent — as production efficiencies can no longer fully offset declining cattle numbers. Prices, he said, are again expected to rise.
The key takeaway for producers is clear.
“Demand really matters,” Coffey says. “What consumers think about beef feeds all the way back up the supply chain and determines profitability. Strong consumer demand right now is providing price support beyond what supply factors alone would explain.”
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