Beef cowWhile the beef cattle herds in the U.S. have shrunk 2% in the past year, wholesale market prices remain 36% higher compared to one year ago. This disconnect from the typical market response has led to curiosity as to what is contributing to this trend. Continued drought across the country has undoubtedly played a large role in the reduction in beef production, with over 65% of the West still experiencing extreme conditions, including only 28% of cattle in the U.S. not subjected to conditions related to drought. Secondarily, while consumers have shown their willingness over the past year to purchase beef at high prices, profits are often absorbed by the packers, not making their way to the producer level. A study showed, over the past five years that while the price of beef has risen, producers share has dropped over 14% (51.5% to 37.3%). Read more about why analysts believe this trend of high prices will continue.