By Jack Hough

It's late morning in Central Texas Hill Country, and a Black Baldy is prodded into a small auditorium of Western hats and dusty ball caps. Her dark coat and stark white face is typical of this cow breed known for easy calving and attentive mothering. "It's going to go as a packer animal," says Tim Niedecken, who works for the Jordan Cattle Auction. He means that the cow will be sold by the pound for slaughter. Perhaps she no longer breeds well. More likely, the high price of beef is too tempting.

"Dollar bill, dollar bill," hollers the auctioneer. A staccato blur of two-cent increments follows as fast as tractor pistons firing under load. Buyers sit motionless but for a few flickering hands, and 21 seconds later, the price is set at $1.30 a pound. It's half what finer cattle sell for, but double what similar cows fetched five years ago. Now the weight. The Jordan company, with its Thursday auction here in San Saba and on Mondays an hour away in Mason, is one of the biggest cattle sellers in the biggest cattle state. Its bidders, who supply McDonald's and Wendy's as well as posh steakhouses, like weigh-ups, where their experienced eyes must guess what the scale will say. Jordan will sell perhaps 1,100 head of cattle today for over $2 million. This cow comes in at 940 pounds, or $1,222.

Outside, nine mounted cowboys whistle and yip, moving pens of mooing cattle into position for sale. But not pen 508. There, four dozen identical Red Angus stand undisturbed. These are replacement cows, quality breeders to take the place of cows sold for beef, and they were expected to go for about $3,500 each at a special auction on Saturday, before it was canceled due to a rare incoming snowstorm. "If you really want to grow the herd, this is the kind of thing you're going to have to have a lot more of," says Niedecken.

The herd in this case refers to the U.S. cattle population, which recently hit a 75-year low. Steak prices have shot 55% higher over the past five years, and ground beef, 69%. These American staples might not weigh on household budgets like car insurance and electricity, but they are frequent cost-of-living reminders to any grocery shopper or restaurant diner.

Grade-school economics teaches that as the price of a widget rises, manufacturers will want to make more widgets. So, why aren't ranchers running more cattle? What does it mean for operators large and small along the supply chain? To get the answers, Barron's recently rode along with ranchers, and called on cattle marketers, buyers, Wall Street analysts, and restaurateurs, plus a Texas lawman whose unit has been chasing cattle rustlers for a century and a half. He says business is up.

Beef demand is resilient, despite high prices. Protein is enjoying a star turn among macronutrients: The U.S. government recently flipped its food pyramid illustration upside-down, giving a fat steak a place of honor at the top, and banishing bread to the bottom. Texas Roadhouse shares have returned 95% over three years, beating the S&P 500 index. It and LongHorn Steakhouse, owned by Darden Restaurants, have enjoyed faster growth than most casual-dining chains since Covid. Big players can manage beef costs, and their fans are willing to pay up.

Small restaurants are struggling more. The Barn Door calls itself the oldest steakhouse in San Antonio. It recently sold a 15-ounce rib-eye grilled over mesquite and charcoal, with sides, for $44.99 -- more than some in this older neighborhood are used to paying. "It's a tough market, " says owner Randy Stokes. "It has to be value driven right now." Stokes carves his own steaks to contain costs, and tries to be creative with prices without couponing. Servers push a 10-ounce rib-eye -- just big enough to order medium-rare -- plus four shrimp, sides, and homemade pie, for $55.

Restaurants aren't to blame for costly beef. Screwworm is, to a point. These parasitic fly larvae burrow like corkscrews into warm-blooded animals and feed on living flesh. An outbreak in Mexico has halted cattle imports -- typically 4% to 5% of U.S. supply. Brazil and Australia are key suppliers of beef cuts and ground beef, but not cattle, and usually not high-end steak. What has made screwworm so inflationary is that the U.S. cattle supply was so low to begin with. Cattle and calves numbered 86.2 million in January, a new Department of Agriculture report shows. That is down from a peak of more than 130 million head in the mid-1970s. It is the smallest herd since 1951, when America's population numbered 157 million, less than half what it is today.

Moving back from restaurants to key stops along the beef supply chain, we get to meatpackers, which slaughter, skin, and break down animals into large sections called primal cuts, including chuck, rib, and loin. Beef packing is an oligopoly, with more than 80% controlled by four players: Tyson Foods, Brazil's JBS, Cargill, and National Beef. These are often blamed for high prices, but if the packers are profiteering, they don't seem especially good at it now. They're operating far below capacity for lack of cattle, says Andrew Strelzik, who covers agribusiness, protein, and restaurants for BMO Capital Markets. "It's hard for me to say that they are doing something to raise the price of beef to their own benefit when they're losing hundreds of millions of dollars," he says.

Tyson, expected to record a third year of beef losses this year, recently announced the closure of a Nebraska plant. But Strelzik in early January upgraded the shares to Outperform, partly because of healthy chicken and pork profits, and a reasonable valuation. Shares recently traded at 16 times earnings. Early this month, UBS initiated coverage of JBS, which listed its shares in the U.S. last year, at Buy. It goes for eight times earnings, reflecting high beef exposure. UBS predicts a rising valuation over the next one to two years on anticipation of a return to normal margins down the road.

Feedlots aren't behind rising beef prices, either. There, weaned calves of six months to a year arrive weighing 400 to 800 pounds. They're fed on grain for four to six months until reaching a slaughter weight of 1,200 to 1,400 pounds. Nebraska is the biggest state for feedlots, some of which are owned by packers. But these work off of prices set at cattle auctions. The Jordan one charges a 3% commission, plus the cost of feed and such. It, too, is beholden to a player at the beginning of the chain who decides supply. To truly understand what is driving beef prices, we must visit the most self-reliant worker in America: the cow/calf rancher. Two Texas families will provide answers that involve land prices, succession, and rain, rain, rain.

To say that Dick and Caroline Runge's ranch is in the town of Fort McKavett isn't quite correct. A nearby fort of that name was used to fight Comanche and hold Civil War prisoners, and William Tecumseh Sherman once called it "the prettiest little post in Texas." When the 16th Infantry Regiment left in 1883, settlers moved into the abandoned buildings and formed a town. But the last resident moved out in 1973. The Runges are townless, with 8,400 acres, nearly three-quarters owned and the rest leased. There are six bulls and 185 cows, down from a high of over 300. A good rule of thumb here is that each cow needs 24 acres. Most cow/calf ranches are small. The average is under 50 head.

Dick uses a wheelchair and doesn't talk much. Old age and Parkinson's have taken a toll. Caroline suddenly finds herself wheelchair-bound, too, for the next few weeks. A 150-pound goat struck her leg, breaking her femur. There are no ranch hands and only occasional hired help. Caroline's daughter, visiting from Massachusetts, drives the group in a Kawasaki off-roader along a craggy path. A pudgy house dog with short legs has won a seat in the vehicle. Dust billows. There are clusters of live oak, all branches and little trunk, loved for their deep shade and drought tolerance. And there are thorny mesquite: invasive, thirsty, and uprooted by dozer in an unceasing war.

Swaths of Texas have been in moderate to severe drought since 2020. Ranchers like to say they raise grass, not beef. Caroline, who has a law degree from the University of Mississippi and was honored by the Texas House of Representatives for her work on groundwater management, explains the delicate economics. Cows must feed on native grass. The cost of supplemental pellets and liquid nutrients has shot higher, part of a 55% price growth for all rancher inputs since 2020, according to an analysis last year by American Farm Bureau Federation, a trade group. The less rain, the less grass. In bad years, like 2023 and 2024, ranchers buy hay and lose money. Many thin their herds to cover costs.

Last year brought a year's worth of rain in a month and a half, washing out ranch roads. But the land is dry again. With beef prices so high, some ranchers want to see more rain before rebuilding their herds. Everywhere there is talk of heifer retention, a heifer being a young cow that hasn't yet had its first calf. It can be sold for beef today, or held for breeding. But it takes two years for a newborn female calf to have a calf of its own, plus another six to eight months until that calf is weaned and sent to market, fetching perhaps $1,500 to $2,500. It's a multiyear bet on prices and rain, versus locking in a quick profit.

Caroline Runge says she has started to rebuild her herd. Nationally, heifer retention has picked up only minimally. Brian Vaccaro, a restaurant analyst at Raymond James, tracks the percentage of heifers on feed as a sort of leading indicator -- fewer on feed means more on grass, and these have probably been kept for breeding. His latest reading is just under 39%. It will need to go to the mid to low 30s to match historical heifer retention. That would mean less beef on the market at first, so prices might have to rise before they fall. Meaningfully cheaper steak could take years.

The Kawasaki stops near a narrow alley of steel rails, ending in a squeeze chute, or mechanism for keeping cattle in place. Herding dogs and Dick's daughter, Lisa Brown, who is taking over ranch management, coax a cow in. She helps Dick to the rear of the chute. He has long experience in rectal palpation, a test for the presence and gestational age of a fetus. He stretches a latex glove to his biceps, but his arm will eventually disappear to the shoulder. It is a jarring sight -- cattle-raising isn't a career for the squeamish. "One-third," he calls. The fetus has reached the end of its first trimester.

Back at the ranch house, the conversation comes around to land. White-collar workers from San Antonio, Austin, or Dallas will pay $2,000 and more per acre for tracts to use for deer hunting or hobby ranching. There is an agricultural tax break that allows the Runges to value their land at less than $50 an acre. "If we had to pay property taxes on the market value, we couldn't stay in business," says Caroline. The program has been relaxed to allow even hobbyists to benefit, a common line of mockery here. "Now you can do it with hummingbirds," says Caroline.

The Runges supplement their cattle income by raising goats and selling hunting leases. Lucky ranches can sell oil rights. Even so, there is a sense that outsiders have bid land prices up to levels that don't make sense relative to the money to be made from ranching. Caroline reckons her return on investment is about 1%.

Dick's great-grandfather bought land here in the 1870s. Today, "if you're going to have a ranch you have to either inherit it or marry it," says Caroline. There are windmills to repair. Fences to mend. Come spring, calves are rounded up for "marking" -- vaccination, branding, and for males, testicle removal. This reduces aggression and promotes weight gain, separating steer for beef from bulls for breeding. "A friend of ours who is a banker said, 'Why don't you sell the ranch? Then you could really live a lavish lifestyle,' " says Caroline. "The ranchers that we know, this is what they want to do. We are out in this wonderful place. We don't have bosses. We do exactly what we want."

If the Runges are a guide, ranchers will increase their herds, but in the short run it will take rain, and in the long run, willing heirs. Genetic sorting has improved beef quality, narrowing breed differences and raising average grades. Eric Hansotia, CEO of AGCO, a giant in tractors, says raisers of dairy cattle have been crossbreeding them with Angus, for the option of selling bull calves for beef. "When the market shows pricing power, creativity starts flowing in, and I think we'll see a rebuilding of the beef herd," he says.

The real marvel of beef isn't that cow/calf ranchers defy widget economics. It's that given the value of the land, there are still families laboring for modest yields rather than liquidating for an easy payday. The state of Texas awards special recognition to families that have continuously run ranches for more than a century. Time to meet another one of them. The Wrights show how ranchers manage vast work relying mostly on kids and grandkids, and how they keep the land intact.

As we leave the Runge ranch the next morning, tiny pockmarks dot the dust -- a rumor of rain. The day brings an indecisive drizzle.

"My daddy always said you'll take a rain and a baby calf any day," says sixth-generation rancher Dora Wright. She and husband, Jim, have a larger operation than the Runges -- just how many acres and head, Dora prefers not to say. They took down their herd by 20% during a devastating 2011 drought, and haven't yet built it back up. Jim's Chevy 3500 rattles over rocks and ruts, the interior caked in dirt, with slashes on the dash where his dog normally sits. "You don't want to buy a used pickup from me," he says.

Jim stops the truck and sounds the horn for seemingly no one and nothing. In the distance, a group of trotting cows appear. "The best cowboy is a bag of feed," he says. "The cows are trained to come to the horn." When he worked for Dora's father, Jim ripped feed bags open in the back of the truck. Now he presses a button and a machine dispenses supplement pellets. The hungry cows bulge from both sides. "We're calving now," says Jim. This is to sell weaned calves in early summer, when the supply is typically low, and the bidding fierce. The Wrights plan to retain heifers for the first time in years, but the grass will decide.

To maximize breeding success, the Wrights use a genetic predictor called expected progeny difference, or EPD, to identify bulls that will produce small but healthy offspring. "That gives that young female a better chance of producing a live calf," says Dora. "Because if she messes up on the first time out, she's done." For cows, tracking past births beats relying on looks. "You might have a skinny little cow that has a great calf," says Jim. "She looks bad, but...hey, we got to keep her." Dora, the record-keeper, has a degree in computer science. "I'm married to a computer guru," says Jim. "If I were doing all that with a No. 2 pencil and a Big Chief tablet, it would not get done."

Affordable predator control is a must. Cattle can fend for themselves against coyotes, but goats cannot. That is the job of the Wrights' imposing guardian dogs, who were raised with goats from the time they were pups. Feral hogs are a bigger menace. "You can clean your water trough just before dark," says Jim. "The next morning it will have two inches of mud in it. Half the time they break off the valve." Sport hunters will shoot hogs from helicopters with AR-15 rifles, like one group from Mississippi. "They killed 230-something head," says Jim. "It doesn't cost us as ranchers anything."

As ranches are passed down to heirs, they often get split into smaller and smaller tracts, many with absentee owners and little livestock. "It's all being purchased by oilmen and people from elsewhere, and the first thing they do is put up a high fence and a fancy gate," says Jim. The fences are for holding stocked exotic game, but they often fail. Blackbuck, a species of antelope native to India, have multiplied in the area and compete with livestock for food. The Wrights, like the Runges, have children who will carry on ranching, including Jim's daughter and her husband, who are nuclear engineers. "They worked in Minnesota for a while at a power plant, and then, thank the Lord, decided to come back to Texas," Jim says.

The family uses a limited partnership to preserve the ranch and give everyone a stake. Come spring, everyone participates in calf marking, with grandkids as young as 12 giving vaccines.

A small squeeze chute helps. "We've done the cowboy thing in the past," says Jim. "We've done like Taylor Sheridan [creator of the television ranching drama Yellowstone], hemmed 'em up in the corner over here and roped 'em and drug 'em out. But our horses are too old to do that any more. I'm too old."

Dora says her favorite therapy is putting on an audiobook, climbing into her skid steer farm machine, and dozing mesquite trees. "That is worth more than a dollar bill coming into my bank account," she says. When she was small, ranchers encouraged their kids to leave for better pay with less toil. In her family, she says the pendulum is swinging back, for now: "Whether this will be viable when our grandkids have grandkids, I don't know."

As we leave cattle country, the rain has stopped. Ranchers are watching for that strange incoming snowstorm that canceled the Jordan company's Saturday auction in San Saba. Cows will huddle together and endure the cold. But if trough ice isn't broken up, the herd will die. For the land-rich and eternally laboring, there will be little weekend rest.

Write to Jack Hough at jack.hough@barrons.com. Follow him on X and subscribe to his Barron's Streetwise podcast.

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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February 13, 2026 00:30 ET (05:30 GMT)

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