This year’s been a rough one for meat lovers. There’s the New World screwworm, a flesh-eating parasite from Mexico that led to dozens of confirmed livestock infestations. There’s drought affecting 75% of all livestock in the country, leading to a 75-year low for cow herds. That, coupled with tariffs on Brazil, the largest exporter of beef, helped make the average price of a pound of ground beef hit $6.89 in July, up 10% from a year earlier.
The Department of Justice now wants to know whether eight of the country’s largest grocery retailers can be blamed for it.
Federal investigators are scrutinizing Walmart, Costco, Amazon, Kroger, Publix, Albertsons, Aldi and Ahold Delhaize USA for beef affordability, with the DOJ calling beef prices a “priority” for the agency in a Sept. 1 X post announcing the probe. The retailers and the DOJ did not respond to Fortune’s requests for comment.
The Trump administration has zeroed in on tamping down beef prices, as the cost of staples like ground beef shape how consumers judge inflation, a key issue for voters ahead of the midterms.
The new probe into retailers seems to build on the department’s antitrust investigation into meatpackers that launched in May.
Trump asked the DOJ to probe meatpackers over beef prices in November, accusing them of “driving up the price of Beef through Illicit Collusion, Price Fixing, and Price Manipulation.” He scrapped 40% tariffs on Brazilian beef the same month, and announced last month a plan to allow 300,000 metric tons of it into the country without being subject to out-of-quota tariffs.
The administration also tried other ways to ease prices. It started importing beef from Argentina, which drew backlash from American ranchers who said the move would introduce disease risks to domestic cattle and do little for grocery prices. The Trump administration also started allowing some imports of Mexican livestock back in on Aug. 24 after having barred them in July when Mexican cattle tested positive for screwworm.
Meanwhile, the meatpackers have struggled financially. Tyson announced it’s closing two beef plants and selling a third one on Aug. 13 a week after reporting a $138 million operating loss in its beef segment. JBS, headquartered in Brazil, halted beef processing at its Pennsylvania plant a day after Tyson’s announcement, having reported a $279 million adjusted operating loss for its North American beef.
Trump announced last week that he’s allowing ranchers to process meat themselves, but it’s unclear how he plans to alter meat processing regulations. Ranchers can process their own meat for personal use but can’t sell it unless it meets strict safety and sanitation standards and undergoes inspections.
Other factors hiking up beef prices
Herd size is a big factor in making beef costlier. Farmers had 86.2 million cattle and calves at the start of this year, the lowest number since 1951, according to data from the U.S. Department of Agriculture. This is because the costs of maintaining a herd—feed, fertilizer and equipment—have gone up as a result of tariffs and drought, so fewer farmers breed cows for slaughter, which restricts beef supply.
While cow-calf ranchers, who supply cows for the entire industry, are able to raise prices and mint fortunes, other farmers are stuck buying more expensive cattle and face slimming margins.
Another hurdle is the time it takes for cows to reproduce and be ready for slaughter. Heifers are bred from between 12 to 15 months of age, and calves have a gestation period just under a year before staying up to 10 months with their mothers. Then farmers face the choice between keeping calves for more breeding stock to rebuild the herd or sending them to beef production.
But farmers know this biological cycle and can handle it without market interference.
“They’re not asking for anything,” Derrell Peel, a professor of agribusiness specializing in livestock at Oklahoma State University, told Fortune last year. “Basically, they just want everybody to get out of the market and let it do what it does.”