As Memorial Day weekend approaches, there is the question of market highs as we head toward the grilling season. I think it is worthwhile to look back at a year ago this time.
During the first week of May 2025, the Choice Cutout averaged $345/cwt., the Select Cutout $332/cwt. and the Comprehensive Cutout $342/cwt. Those prices peaked at $414/cwt. (+20%), $387/cwt. (+17%) and $409/cwt. (+20%), respectively.
This year during the week of May 9, the Choice Cutout averaged $390/cwt., the Select Cutout $388/cwt. and the Comprehensive Cutout $391/cwt. This year’s prices are 13%, 17% and 14% higher for each of the respective cutout values than a year ago.
| Cutout Category | May 2025 Avg | May 2026 Avg | % Change |
|---|---|---|---|
| Choice | $345 | $390 | +13% |
| Select | $332 | $388 | +17% |
| Comprehensive | $342 | $391 | +14% |
Is there a limit to how much current beef demand can drive those prices? My response is, “yes” and we are not too far from that limit.
The Government Question: Let Markets Be Markets
Record-high beef prices are the topic of discussion in cattlemen’s meetings, among market analysts, restaurant procurement, government, and state and federal legislatures with the discussion ranging from “Can prices go much higher” to the government assessing how to “Reduce prices for the consumer.”
My reaction when the government enters the discussion is that we do not need any government entity whether the administration, USDA or Congress to get involved. Markets operate best according to nonmanipulated supply-demand fundamentals, those very drivers that got us to the point of record prices in the first place. Manipulating the market toward the goal of lowering prices for the consumer is not an option, whether it be trade-related or any other manipulation.
For the last 12 months, we have discussed and discussed when rebuilding of the cattle herd will begin. The consensus from all this expert analysis and discussion is that rebuilding will be slow. Why? My response is that the industry and the people involved have changed from those of past cattle cycles.
Farmers and ranchers are older and many no longer have family members who have come back to the ranch after graduating from high school or college. This is a critical factor for those existing full-time cattle ranching operations. These full-time cattlemen whose family members did not come back to the ranch are growing older and slowing down.
But the real driver to cattle numbers is the part-time cattleman — those who also have a cropping operation with pasture to raise a few cattle or people who don’t farm or ranch full time but have pasture, work at another job and want a few (25 to 50 head) cattle.
I believe these part-time cattlemen have declined significantly.
Opportunity Cost: The Barrier to Heifer Retention
Aside from changing demographics of cattlemen, there is another critical issue to herd building and one which has been a driver in previous cattle cycles — record-high prices. While today’s prices are certainly a godsend to full-time cattlemen already in the business, those same record-high prices make the proposition of buying cows to get into the business a challenge, to say the least. And, for that matter, record-high prices can also be viewed as a record-high opportunity cost when a heifer is retained.
