Walmart cuts beef 12% after USDA pressures grocers on pricing

The Trump administration pressed the nation's largest grocers to lower beef prices, exposing a tension between political promises and a 75-year low in cattle supply.

The USDA called Walmart, Kroger and Albertsons days before July 4 to ask about beef prices, a direct intervention that yielded a 12% cut on ground beef at the nation's largest retailer — but supply constraints limit how low prices can go.

"With beef, we see the prices high because the supply is low," Robin Wenzel, head of the Wells Fargo Agri-Food Institute, told Bloomberg. "We are at record low cattle supplies, dating back almost 75 years."

Walmart reduced its 73% ground beef roll to $5.94 from $6.74, implemented June 29, according to the company. The U.S. cattle herd stood at 86.7 million head as of Jan. 1, the smallest since 1951, after years of drought and rising feed costs shrank supply. Ground beef averaged $6.745 a pound in May, up 11% from a year earlier, Labor Department data show. Walmart also cut prices on more than 250 seasonal items including soda, chips, ice cream and fresh produce, with a market basket of nine listed grocery staples dropping 25% to $54.70 from $73.42.

The price cuts come as 63% of Americans rank groceries as their top financial pressure, according to a June survey by Global Strategy Group. But with cattle supply at generational lows and consumer demand steady, the gap between political pressure and market fundamentals may keep beef costs elevated through the peak summer grilling season.

Tate Bennett, chief of staff for USDA Secretary Brooke Rollins, held calls last week with Walmart, Kroger and Albertsons to discuss beef pricing plans ahead of the July 4 holiday weekend, according to people familiar with the matter. Walmart told the USDA it already planned summer price reductions and implemented them on shelves June 29, later issuing a press release. President Trump claimed credit Monday on Truth Social, writing that Walmart lowered prices "at my administration's request" to celebrate the nation's 250th birthday. Walmart's announcement made no mention of the White House.

The administration's outreach reflects a broader push by Trump to lean on industries to lower costs for consumers — an unusual step for a Republican administration. Trump has separately urged gasoline retailers to cut fuel prices, called for a cap on credit-card interest rates and requested pharmaceutical companies reduce drug costs. Senior administration officials including Rollins, White House deputy chief of staff Stephen Miller and trade adviser Peter Navarro have been tasked with finding ways to curb beef prices.

The supply problem has no quick fix. A three-year drought beginning in 2020 dried out pastures and raised feed costs, pushing ranchers to reduce herds. The U.S. cattle count has fallen 8% from its most recent peak in 2019. Washington also blocked imports of Mexican cattle more than a year ago because of the screwworm parasite, further tightening supply. "In times like this, when the domestic supply is already inadequate to meet domestic demand, the inaccessibility of Mexican cattle supplies exacerbates the supply-demand imbalance, sending markets spiraling," Bill Bullard, CEO of cattle producers group R-CALF USA, told Reuters.

The administration has taken additional steps. The Justice Department launched a probe into the four largest U.S. meatpackers after a Trump social media post last year. The administration also pledged as much as $500 million to small and midsize meatpacking companies to help maintain beef production. Walmart, meanwhile, is using billions of dollars in expected tariff refunds to fund price investments. "We think the single best return that we can have on a dollar of capital right now is to invest in the customer and invest in price," Walmart Chief Financial Officer John David Rainey said during the company's May earnings call.

Overall 12-month inflation runs at 4.2%, with food-at-home prices rising at a 2.7% annual rate in May, government data show. Wells Fargo estimates a summer barbecue for 10 people will cost about $161, up 2.4% from last year. Some relief may come from other proteins: chicken breast prices rose only 3% and pork ribs about 3%, Wenzel said.

This article is for informational purposes only and does not constitute investment advice.