"This 4th of July, Americans are paying some of the highest beef prices ever recorded. And yet, they're still buying steaks. In fact, despite record prices at grocery stores and restaurants, beef demand is proving surprisingly resilient. Here's what's happening. The U.S. cattle herd has shrunk to its smallest size since 1951, after years of drought, expensive feed costs, and ranchers reducing herd sizes. According to the USDA, U.S. cattle inventory stood at 86.2 million heads as of January this year. That's down roughly 45 million from the mid-1970s peak. That supply crunch has pushed cattle prices and, ultimately, beef prices, sharply higher."