From Joanna Guza’s interview with Lance Zimmerman at the NAFB convention
As we look toward 2026, the headlines regarding the beef industry are dominated by one theme: record-high prices. According to Lance Zimmerman, Senior Beef Industry Analyst for Rabobank, this price environment is driven by a unique combination of tight supplies and demand hitting a 40-year high.
In a recent interview, Zimmerman broke down the complexities of the current market, from the controversy over imports to the surprising culinary habits of younger generations.
The Supply Paradox While it is true that the US cow herd has been in decline since the highs of 2019, per capita beef supplies have remained remarkably steady over the last six years, hovering between 58 and 59 pounds per person.
How is supply steady if the herd is shrinking? Zimmerman points to efficiency. The industry has offset the loss in cattle numbers with record-large carcass weights and increased imports. However, looking ahead to 2026, supplies are expected to tighten outside of that steady range, meaning producers should expect the strong market conditions of the last year to continue.
Putting Imports into Perspective Recent headlines have focused heavily on beef imports from countries like Argentina and Brazil. The Biden administration recently discussed increasing the import quota from 20,000 metric tons to 80,000 metric tons. While this sounds significant, Zimmerman offers a statistical reality check.
If all else remained equal, this increase adds roughly half of one percent to the total beef supply.
“Basically, that would be the equivalent of each American eating an extra McDonald’s Quarter Pounder,” Zimmerman explains. While not statistically drastic, these imports provide a necessary outlet for lean beef trimmings that blend with US fed cattle fat to create ground beef, helping ease supply tightness.
The Waiting Game on Herd Rebuilding One disappointment in the current cycle is the lack of heifer retention. Typically, producers retain females to rebuild the herd, but high prices are incentivizing them to sell instead.
We are currently in the middle of “peak weaning” season—the time when producers decide whether to keep a heifer or cash in. Currently, most are choosing to sell. This decision effectively “kicks the can down the road” for herd expansion, pushing any significant inventory growth out to 2027 or 2028.
The Consumer Shift: From Restaurants to Retail Despite inflation, consumer demand for beef remains resilient. However, where people are eating is changing. There is a distinct transition away from restaurants toward meals at home to capture affordability.
Zimmerman notes that the price gap between dining out and eating in has widened significantly over the last 20 years. Today, preparing a meal at home costs about $1.50 more per person than it used to, whereas buying that meal at a full-service restaurant costs nearly $13.00 more. Consumers have realized they can buy a high-quality steak at the grocery store for a fraction of the restaurant price.
The “Traeger Effect” and Younger Generations Perhaps the most optimistic trend for the industry is the behavior of Millennials and Gen Z. Contrary to the belief that younger generations don’t cook, they are actually the chief buying demographic right now.
Shaped by the pandemic, these younger consumers have invested in the tools of the trade—Traeger grills, Blackstones, Air Fryers, and Sous Vide machines. They are comfortable cooking high-quality beef at home, driven by a different set of value judgments than previous generations.
As Zimmerman notes, if prices are going to be this high, the product better be good. Fortunately, demand for Prime and Choice beef suggests that consumers still see the value in US beef.
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