Fed Cattle News

Drought Stalls Expansion: 75% of U.S. Beef Cows in Dry Conditions

Mon, 27 Apr 2026 16:18:29 GMT

The formula for herd expansion may be simple — “grass plus profitability equals more cattle” — but the reality on the ground is anything but. CattleFax analyst Holden Ramey says nearly three‑quarters of the U.S. beef cow herd is currently in drought, sharply limiting the industry’s ability to rebuild numbers.

While profitability signals are strong, he says, dry pastures, high interest rates, costly inputs and market volatility are forcing many ranchers to delay or scale back heifer retention.

“We’re seeing some retention on a limited basis,” Ramey notes, “but it’s a slow, cautious rebuild, not a full‑throttle expansion.”

Ramey shared an outlook on the U.S. beef cattle cycle, herd dynamics, feed and grain markets, drought impacts, trade, demand and price expectations across the cattle and beef complex during the “Breakthrough Symposium: New World Screwworm Preparedness” on Friday in San Antonio, Texas.

His core message: supplies will stay historically tight, demand is exceptionally strong, expansion will be slow and cautious, and effective risk management is critical.

Here are seven key takeaways from Ramey’s presentation:

1. Slow, U‑Shaped Herd Rebuild – Tight Supplies for Years

Ramey predicts the beef cow herd is near its low for this cattle cycle, but the rebuild will be slow and cautious, not a sharp V‑recovery. Weather, high interest rates, input costs, aging producers and volatility are all dragging out expansion, even with strong prices.

He says calf and feeder supplies will stay tight, keeping markets in a higher trading range, even if the industry stops making new highs every year.

2. Drought Is the Biggest Brake on Expansion

About 75% of the U.S. beef cow herd is in drought, compared to a long‑term average near 20%. El Niño and a neutral pattern offer some relief ahead, but much of “cow country” is still in rough shape, limiting heifer retention and herd growth.

(CattleFax)

He predicts some producers who tried to hold heifers may be forced to “send them down the road” due to lack of feed.

3. Demand Is Exceptionally Strong Despite High Prices

He says since January 2020, the average price of ground beef has increased approximately 72% and retail beef is up approximately 61%, versus overall inflation up approximately 28%.

Ramey admits even with cheaper pork and poultry, there’s little evidence of major trade‑down away from beef — more trading down within beef (steaks to ground) than out of the category.

Higher grading — about 85% Choice and Prime, and approximately 20% Prime — plus the protein diet trends and GLP‑1‑driven nutrition advice have helped build durable beef demand.

4. Feed, Days on Feed and Carcass Weights Are Offsetting Fewer Head

Ramey says cheap corn supports longer feeding periods. On average, steers are averaging 190 to 200 days on feed. Simultaneously, average carcass weights increased 52 lb. in 2024 and 2025, which is equivalent to about 1.9 million head of added supply. Note: The long-term average of carcass weight increase historically has been 5 lb. per year.

(CattleFax)

He explains this means the rally is as much demand‑driven as supply‑driven — not the tightest tonnage ever, but prices are still very strong.

5. Trade Shifts: Mexico, Canada and Boxed Beef Flows

He says the screwworm ‑related closure of the Mexican border in 2025 slashed imports from approximately 1 million head to around 200,000, significantly tightening U.S. feeder supplies.

Even if the border reopens, Ramey does not expect a quick return to 1‑million‑head years due to health protocols and more feeding capacity in Mexico.

He also says exports are down and imports up, as tight U.S. supplies and high prices draw more product in and keep more domestic beef at home.

6. Leverage and Profitability Have Shifted Toward Producers

After the COVID/packing bottleneck era, the industry now has more slaughter capacity than cattle, so leverage has swung away from packers. Fed cattle’s share of the cutout has rebounded to around 59%, versus the low 40s during COVID.

He reports the total industry profitability is near $690 per head to be shared across sectors, with cow‑calf and stocker operators capturing a big share.

7. Price Outlook: High Plateau Now, Eventual Downside Later

For 2026, Ramey predicts fed steers will mostly be $240 to $250, potential spike to $250 to $255 in late spring/early summer, then softer into $230 to $235 in Q4.

Feeders and calves stay historically high but could see modest pullbacks later in the year, likely smaller than the average 12% seasonal break because supplies are so tight.

He says the CattleFax team expects slightly softer prices next year across cutout, fats, feeders and calves — but still elevated versus history.

Longer term, after this huge up‑cycle — up approximately 200% for calves — Ramey warns of roughly 25% downside risk across fed, feeder and calves sometime later in the 2020s or early 2030s, making risk management critical while times are good.

His message to producers was both optimistic and cautionary. Tight cattle numbers, exceptional beef demand and renewed leverage at the ranch and feedyard suggest that today’s strong prices are not a fleeting windfall, but part of a higher trading range that could persist for years.

At the same time, Ramey warns, drought, high costs, shifting trade flows and the inevitability of the next down‑cycle mean this phase of the market must be treated as an opportunity to shore up balance sheets, invest wisely and lock in margins where possible. The fundamentals may be on the cattle industry’s side, he stresses, but capturing the full benefit of this rare window will depend on how aggressively producers manage both production and price risk in the months ahead.

Cattle on Feed: The Supply Squeeze Continues

Mon, 20 Apr 2026 15:20:51 GMT

The April USDA Cattle on Feed report confirms that the U.S. fed cattle supply remains historically tight, with March placements and marketings reaching their second-lowest levels since 1996. While the latest report landed almost exactly where analysts expected, Patrick Linnell of CattleFax says the underlying message hasn’t changed: fed cattle supplies are tight and likely to stay that way, as lower marketings, fewer Mexican feeder imports, drought timing and more heifers kept for breeding limit cattle available to place.

Linnell, CattleFax director of market research, was a guest on AgriTalk Friday afternoon with Michelle Rook .

Here are the key takeaways from the report:

On feed: 99.5% — Feedlots with capacity of 1,000 or more head totaled 11.6 million head on April 1. The inventory included 7.26 million steers and steer calves, down slightly from the previous year. This group accounted for 63% of the total inventory. Heifers and heifer calves accounted for 4.32 million head, down 1% from 2025.
Placements: 96.7% — Placements in feedlots during March totaled 1.71 million head. Net placements were 1.66 million head. Placements were the second lowest for March since the series began in 1996.
Marketings: 94.5% — March marketings totaled 1.63 million head. Marketings were the second lowest for March since the series began in 1996.

(USDA)

One point Linnell emphasizes is the on-feed number didn’t drop as sharply year over year as some might assume in a tight-supply environment. He explains this apparent disconnect is largely a function of cattle staying on feed longer and yards remaining relatively full.

Despite that technical nuance in the on-feed totals, Linnell stresses the takeaway for producers and the trade is straightforward: “So overall, the message is simply that supplies remain tight and fed cattle numbers should remain pretty tight here for the foreseeable future.”

(USDA)

“Placements were off close to 7% to 8% from year ago, which was what we and other groups had predominantly expected with the marketings below year ago levels,” Linnell says.

Kenny Burdine, University of Kentucky livestock agriculture economist, summarizes the report includes some sizeable decreases from last year on placements and marketings, but very much in line with pre-report estimates.

“The decrease in heifers on feed is worth noting,” Burdine points out. “While 37.3% is still relatively high and just above the 20-year average, the numbers are slowly trending downward. It’s actually the smallest heifer percentage since 2018, but that is a little bit deceiving because we have been below 38% several times since then. I think this year is setting up such that beef cow slaughter will be the inventory driver. It is down 18% year-to-date, from a very low number last year.”

(USDA-NASS, Cattle Market Notes Weekly)

Burdine, in the recent “ Cattle Market Notes Weekly ” article, explains, “The bigger story of 2026 may be less about heifer retention and more about beef cow slaughter. After culling the herd very hard from 2021 to 2023, beef cow slaughter was sharply lower in 2024 and 2025.”

Through the first 14 weeks of 2026, beef cow slaughter has been running almost 18% lower than the same time last year.

(USDA-NASS, Cattle Market Notes Weekly)

“If that trend held for the balance of the year, the 2026 beef cow culling rate would be about 7%, when the culling rate has averaged over 9.8% the last 20 years,” Burdine summarizes. “Weather conditions are likely to impact both heifer retention and cow culling as we move through current year, but the current pace of cow slaughter may be the largest inventory driver as we move towards 2027.”

Considering regional and state-level placements, Linnell highlights Texas as the focal point of the decline. He ties much of that weakness directly to the lack of Mexican feeder cattle coming across the border.

“As you look at the regional on-feed numbers, Texas still composes the bulk of the decline compared to either year ago or a five year average, off 10,000 from year ago or down 268,000 head from a five year average,” he explains. “I think that really just does reflect that continued lack of the Mexican feeder cattle supply.”

At the same time, the story is not limited to Texas. Linnell notes that most regions and states are showing declines relative to historical levels, which fits the broader cattle cycle.

“You’re noting those declines from a five year average in pretty much all regions and states as well, which is really no surprise when you think about where we’re at from a cycle standpoint,” he adds.

(USDA)

He adds the softer marketing number was no surprise either, given how tight supplies have been and how slaughter has lagged.

“There’s no surprise with combination of just tight, tight supplies and the fact that, you know, we’ve had slaughter running well below year ago. The decline in marketing’s was no surprise whatsoever, either,” he says.

Derrell Peel, Extension livestock marketing specialist from Oklahoma State University, agrees with Linnell and Burdine summarizing there is nothing really earth-shaking in the report.

“Placements and marketings were both down about as expected,” he says. “On-feed total down 0.5% year over year, continuing the slow decline. Monthly cattle on feed have been down 17 consecutive months. Feedlot throughput (turnover rate) has slowed more than cattle on-feed levels indicate with placements in the past year year down 8% and marketings down 6.7%.”

Peel stresses heifers on feed, April 1 was 37.3%, down slightly from one year ago and about at the long-term average. The level is consistent with inventory and slaughter data, indicating very low and slow levels of heifer retention.

Placements Outlook: Drought, Border and Heifer Retention

Looking ahead, Linnell expects placements to continue trending below year-ago levels, even as drought and timing issues could pull some cattle off grass earlier.

“We’ll continue to see placements as a pattern that are running below year ago levels,” he says.

He acknowledges that drought could force some early movement.

“Yes, you probably do see some drought movement, some cattle coming early, but I think we’ve already seen that on a year to date basis, as well as you think about that February number that was above year ago for placements,” he explains.

Linnell also reminds AgriTalk listeners that last year’s partial border reopening to Mexican feeder cattle during March through May affects how current placements stack up in year-over-year comparisons.

Another structural factor tightening the pipeline is increased heifer retention. More heifers are being held back for breeding, which reduces the pool of animals available to send to feedyards.

“Even despite these dry conditions, it still appears to us that there is an increase in heifer retention,” he summarizes. “And so with that going on, that’s more animals that you’re taking to supply to place, right?”

Bottom Line: Tight Supplies For the Foreseeable Future

Across his comments, Linnell consistently came back to one central theme: the Cattle on Feed report confirms a tight-supply environment that won’t resolve quickly. Even if the headline on-feed number doesn’t fall as much as some might expect, the underlying drivers — lower placements, constrained feeder flows from Mexico, increased heifer retention and extended days on feed — all point in the same direction.

In his view, that means fed cattle numbers will remain limited going forward, and the industry should plan around a tighter supply backdrop.

“Overall, the message is simply that supplies remain tight and fed cattle numbers should remain pretty tight here for the foreseeable future,” he summarizes.

Listen to the entire conversation between Linnell and Rook.

Keeping the Family Farm and Rural Community Alive with an Innovative Mindset

Thu, 02 Apr 2026 18:24:11 GMT

Innovation doesn’t always look flashy in agriculture. Sometimes it’s simply a willingness to try something new if it makes the operation stronger for the next generation. For one Indiana cattle family, that mindset has been the key to keeping both the cattle operation and its rural community moving forward.

“My grandpa’s grandpa stepped off the boat the day Abraham Lincoln was killed,” says Andrew Bredeweg. “Our farm started as more of a self-sustaining farm with a little of everything until my dad turned it more into a business.”

Today, the Bredeweg family has its hands in the cow-calf sector, feeding cattle, farming and managing a seasonal sale barn. At the heart of all they do is ensuring the business remains generational while also supporting the rural community around them.

“Everybody in agriculture pretty much has goals to pass it on to the next generation. It’ll be multigenerational,” Bredeweg says.

The Bredewegs have been able to keep the operation in the family for generations because they’ve maintained a mindset of innovation. That willingness to adapt didn’t start with Andrew. It goes back several generations.

“My grandpa was big into Harvestore systems in the ’60s — he was one of the first guys around here to put that system in,” shares Bredeweg. “That allowed him to feed a lot more cattle in a lot shorter time, which freed him up to farm more or run more cattle.”

That same thinking continues today. The family was among the first in its area to feed cattle using a TMR mixer with drive-along bunks. More recently, they’ve adopted digital recordkeeping through Performance Beef to better track feed, performance and costs.

“Just knowing everything is there and everything is correct is worth its weight in gold,” says Bredeweg. “Our performance on the cattle really showed when we started using it because what we thought we were doing wasn’t actually what we were doing.”

Having accurate numbers has also improved decision-making. Instead of guessing at cost of gain or performance, Bredeweg now has real-time data to guide purchases and management decisions.

Innovation on the Bredeweg operation isn’t just about technology, though. It’s also about strengthening the broader agricultural community.

Bredeweg also manages the local White River Valley Cattlemen’s Association sale barn, a cooperative marketing facility started decades ago by local producers. The sale barn hosts a handful of sales each year and provides an important marketing outlet for cattle producers in the region.

For Bredeweg, involvement in multiple segments of the cattle industry reinforces something he appreciates about the business.

“There’s a little more of a team aspect in the cattle business,” he explains. “For us to prosper, somebody else doesn’t have to lose.”

That mindset extends beyond cattle markets and into investing in the next generation. Bredeweg has partnered with a local high school internship program that allows juniors and seniors to leave school early and gain real-world work experience with area businesses.

Students spend part of their day learning hands-on skills and exploring potential careers while still in high school. Bredeweg has hosted several students on the ranch and sees the program as a valuable tool for keeping young people connected to rural communities.

“You’re developing them on the school side and then they get plugged right back into the business side,” he says.

For Bredeweg, keeping family operations alive requires more than just maintaining a profitable business. It requires investing in people and community as well.

“I’d rather ask how we grow and keep these young people busy instead of how we contract,” he says.

Because at the end of the day, innovation in agriculture isn’t just about improving efficiency — it’s about ensuring there are still families, ranches and communities thriving for generations to come.

Listen to the full conversation on the Casual Cattle Conversations podcast .

CAB Insider: Feb. 25

Thu, 26 Feb 2026 13:10:27 GMT

The fed cattle market continued to show strength last week as negotiated trade developed very late on Friday. February Live Cattle futures traded near contract highs at $247/cwt. and small cash trade volume in the north centered on that price.

Extremely small harvest volume was the key element in last week’s market, sending a clear message that packer margins — near $300 per head in the red— have forced reductions on throughput. Granted, Monday’s President’s Day was a federal holiday, but this is negated as a consideration for harvest volume, as packer capacity for the week was sharply underutilized.

(Certified Angus Beef)

Friday’s Cattle on Feed report proved uneventful as analyst expectations were met with the number of cattle on feed in feedlots (with at least 1,000 head of capacity) at 98.2% of a year ago. January marketings look quite low at 87% of a year ago, but there was one fewer marketing day this January. With that said, a smaller cattle harvest is evident with year-to-date figures at -5.8%.

Carcass cutout values showed some life with slightly higher values last week on a steadily higher trajectory. Mixed price direction has recently been a theme across the major carcass primals. Firming demand for round cuts is the most notable trend in recent days, as utilization of lean, grinding beef is cropping up again. With spring spot market demand in the forward view, ribeye prices were a bit higher, but they are just trading off of their winter lows.- Wholesale strip loin prices have adjusted lower after making strong moves to the upside throughout January into early February.

Protein Price Spreads

The inflationary theme in the grocery sector is impossible to miss, as most Americans are faced with the buying a large share of their food at retail. Beef has been in the media crosshairs for months as retail prices have escalated. The “all fresh” retail beef price increased 10% from 2024 to 2025, with another 6% the prior year. Yet consumers have a choice in meeting their protein needs, and they continue to demand beef at an impressive level. In fact, beef demand in the fourth quarter of 2025 was record-high, according to analysts at Terrain.

A simpler approach is to realize that U.S. per capita beef consumption was nearly unchanged in 2025 at 58.4 lb., scarcely lower than the 59 lb. in 2024. Couple that with the 10% average annual retail price and one can quickly see that demand was robust.

Even more amazing: Beef has built a rapidly widening price gap over competing meats in the grocery store. This trend has become increasingly pronounced since the early 2000s, but as beef supplies have tightened over the past three years, the pace of the widening price disparity has accelerated.

During 2022, the peak of the cycle’s largest beef supplies, retail beef prices were 49% higher than pork and 200% higher than chicken. This is a large contrast to the 2025 average, with beef pricing 79% higher than pork and 260% higher than chicken. It’s important to note that beef retail prices rose rapidly throughout 2025 as the fourth quarter’s $9.44/lb. average was 13.8% higher than the first quarter average. Once again, the fourth quarter saw record beef demand despite rapidly escalating prices.

(Certified Angus Beef)

Market analysts point to evolving consumer attitudes toward meat as an important component of a healthy diet. The popularity of GLP-1 medications (with meat indicated as a healthy protein source) and the recent inversion of the USDA food pyramid are contributing factors. Consumers may be adapting to the nutrient density and wholesomeness of beef as they compare the return on their grocery dollar to less healthful food options.

It’s imperative to credit beef quality advancement in the consumer behavior discussion. The beef industry is offering consumers the most satisfying eating experience they’ve ever encountered, as the share of USDA Prime and Certified Angus Beef brand product continue to swell as a portion of fed cattle production. This leaves little doubt that marbling-rich carcasses are driving beef to outperform other protein sources in the meat case.

Tighter Supplies and Border Closures: A Snapshot of Today's Cattle Feeding Industry

Tue, 24 Feb 2026 17:44:47 GMT

The U.S. cattle feeding industry is experiencing a period of tighter supplies with the feedlot inventory on Feb. 1 reported at 11.5 million. Historically tight domestic supplies and a disrupted Mexican cattle supply chain continue to cause havoc for cattle feeders.

The recent announcement that Lubbock Feeders , a 50,000-head capacity yard in Texas, will cease operations highlights the growing pressure on the sector.
According to EverythingLubbock.com , the decision follows a series of economic and regulatory challenges that have significantly impacted operations.

The article reports typically between 60% and 70% of the yard’s cattle inventory originated from Mexico. With the U.S.-Mexico border closed due to the threat of New World screwworm , the feedlot has lost its critical supply chain.

The feedlot plans to finish feeding out its remaining cattle currently on-site before ceasing operations. According to the article, management hopes the property itself will remain in agricultural use, preserving at least part of its legacy.

“Unfortunately, it’s not really a surprise,” says Derrell Peel, Oklahoma State University livestock marketing specialist. “Tighter feeder supplies are squeezing feedlots more and more. Given that this feedlot depended so heavily on Mexican feeders, it really puts them in a bind. Also, they are located pretty close to the city of Lubbock, so I suspect they faced growing pressure and environmental concerns.”

By the Numbers: The February Cattle on Feed Report

The latest USDA Cattle on Feed (COF) report was released on Friday. Peel summarizes the report “was well anticipated and did not contain any surprises for the market.”

This marks the 15th consecutive month of declining total cattle on feed.

Here are some key takeaways from the COF report:

Total Inventory: 11.505 million head (down 1.8% year-over-year)
Placements: Down 4.7% year-over-year
Marketings: Down 13% (impacted heavily by January winter storms)

How is the Cattle Feeding Industry Structured?

Peel explains the industry is divided between a large number of small family-run lots and a small number of high-capacity commercial feedlots. The U.S. currently has 26,082 feedlots.

Small Feedlots (less than 1,000 head): Comprise 92% of all feedlots but account for only 12.9% of total marketings. Average marketings from small feedlots were less than 126 head for the year.
Large Feedlots (more than 1,000 head): Comprise 8% of feedlots (2,082) but account for 87.1% of marketings.
The “Big Players": Feedlots with a capacity of more than 50,000 head (82 feedlots) represent only 4% of the industry by count but market 41% of all fed cattle.

(Oklahoma State)

Figure 1 shows the size distribution of feedlots with more than 1,000 head capacity. It illustrates that 60% of more than 1,000-head feedlots have between 1,000 and 4,000 head of capacity.

(Oklahoma State)

Figure 2 shows that these feedlots only account for about 9% of marketings.

Utilization and 2026 Outlook

Total U.S. feedlot capacity is estimated at 17.1 million head, a figure that has remained relatively stable since 2018. However, utilization is dropping as the cattle cycle bottoms out.

Current Utilization: On Jan. 1, total feedlot inventory utilized 81% of capacity.
Large Lot Utilization: Feedlots with more than 1,000-head capacity utilized 67% of total capacity.

(Oklahoma State)

Figure 3 shows that the cattle feeding industry has grown relative to the overall size of the cattle industry.

The industry faces a tightening supply of feeder cattle. As 2026 begins, 16.1% of all U.S. cattle are in feedlots.

Estimated Feeder Supply: 24.5 million head.
Supply Gap: There are 1.77 head of feeder cattle available for every one head currently in a feedlot.

Peel says with a feedlot turnover rate of 1.99, the current supply of feeder cattle is insufficient to maintain current feedlot inventory levels.
“We may see more feedlot closures,” Peel summarizes, suggesting the industry may face further consolidation as feedlots compete for a dwindling pool of calves.

Your Next Read: Beef Cattle Supplies Fall to Lowest Level in 64 Years

Why Livestock Risk Protection is a Critical Consideration in 2026

Fri, 20 Feb 2026 14:16:49 GMT

While cattle prices remain historically high, the 2025 market proved volatility can quickly erode margins.

“Given that the cattle cycle is set for a slow rebuilding phase, there is a reasonable expectation that the market will remain supported for the next few years,” says James Mitchell, University of Arkansas agricultural economist in the Cattle Market Notes Weekly. “But as fall 2025 showed us, cattle markets are not immune to volatility.”

Livestock Risk Protection (LRP) and option premiums are not cheap because cattle prices are high, Mitchell explains.

“This reality has led some to question whether price risk management is worth it at today’s price levels,” he says.

Case Study: The Value of LRP in Fall 2025

To demonstrate the impact of price risk management, Mitchell shares this real-world scenario from Arkansas in late August 2025:

The Setup: A producer planned to sell 550 lb. steers in November

The Policy: Purchased LRP at a $394/cwt. coverage price (100% level)
The Cost: $12/cwt. premium
The Market Shift: By Nov. 24, the actual ending value dropped to $365/cwt.

The Result:

Indemnity Triggered: $29/cwt.
Net Return: $17/cwt. (after premium)
Per Head Value: $94/head added value
Total Per Load: ~$8,500 in protection

Without LRP, the cash price for a 550 lb. steer was $378/cwt. for the week ending Nov. 21. With LRP, the realized price rose to $395/cwt.

Fall 2025 was a reminder of how sensitive the cattle market is to news and surprises. A look at the November 2025 Feeder Cattle futures contract and weekly cash prices (see below) in Arkansas highlight just how quickly prices can move.

(Cattle Market Notes Weekly)

Mitchell admits the example in this article perfectly times the purchase of LRP with the fall 2025 downturn in cattle prices.

“Buying LRP earlier last year would not have triggered an indemnity because the market rallied leading up to the fall,” he says.

Why 2026 Price Risk is Different

While the cattle cycle suggests a slow rebuilding phase with supported prices, structural risks remain. Mitchell explains how the math of risk has shifted:

More Dollars at Risk: A $20/cwt. drop is the same percentage loss regardless of the market, but at today’s record prices, the total dollar loss per operation is significantly higher.
Limited Flexibility: With high interest rates and debt obligations from herd expansion, many producers cannot afford to absorb a $30/cwt. swing.
Volatility is the New Normal: Market shocks from policy changes, trade shifts or weather events happen faster than in previous cycles.

Takeaway for Producers

“LRP is not about increasing the odds of an indemnity payment or maximizing profit,” Mitchell says. “It establishes a price floor and reduces downside risk.”

LRP is not designed to beat the market or guarantee a profit every year. Its primary function is to establish a price floor. Using LRP to cover your breakeven point or secure a target return is a more sustainable strategy than attempting to time market peaks.

CAB Insider: Feb. 11

Thu, 12 Feb 2026 12:55:52 GMT

The fed cattle market has been steadily stronger since the first of the year, gaining $10/cwt. from the opening week’s $231/cwt. value through last week’s $241/cwt. average. This closely matches the early 2025 trend but has extended the pattern a week longer than that of a year ago with last week’s continuation higher.

The drastically smaller year-on-year cattle harvest is a significant factor differentiating 2025 and 2026. Since the beginning of the year, fed cattle harvest head counts have run roughly 10% smaller than a year ago. Tightened cattle supply and packer losses deeply in the red both continue to ration the harvest pace. Logic suggests no changes to throughput as long as both cattle and cutout prices work antagonistically against packer profitability.

(Certified Angus Beef)

A counterbalance to lighter harvest runs continues to rear its head in the form of heavy carcass weights. Latest data for the week of January 19 featured a 3 lb. uptick in steer weights to average 987 lb. each, just 2 lb. below the record marked in December. January weights will average near 30 lb. heavier than a year ago.

Weekly average cutout prices turned modestly lower in early February after the comprehensive cutout value increased 3.6% since the beginning of January. As demand turned to the ends of the carcass, significant discounting on middle meats was a theme last month. History suggests that the most preferred steak items have already posted seasonal low prices, with unseasonably warm weather in some regions coupled with expected early spring buying stimulating prices.

Utilization Key to Prime Success

Fed steer and heifer carcass quality is charting new territory in the first five weeks of the quarter. Record-heavy carcass weights, the longest feeding periods on record and generations of improved genetics continue to press carcass quality grades to new heights. This has generated an average 14.2% Prime carcasses in the fed cattle mix while Select carcasses average an unprecedented low at 9.7% of the total since January 1. This stands in stark contrast to the 10.7% Prime and 13.6% Select grade mix recorded for the same period a year ago.

As the carcass mix continues to press higher with richer quality grades, the expected impact to cutout prices has also come to fruition. The Prime cutout premium to Choice narrowed to $19/cwt. in January versus $59/cwt. a year ago and $37/cwt. in January 2024. This contrast indicates a wide range and directional change in the premium across three years.

However, the number of Prime carcasses in the past five weeks has been 21% greater than a year ago while carcass weights have also been 30 lb. heavier for the period.

(Certified Angus Beef)

Recent Prime demand models show 20% and greater year-over-year consumer demand increases for multiple months for the recent two years. Growing Prime supply has been met with growing demand, generally across the last decade. The recent added upswing in the Prime carcass supply suggests that expanded utilization of Prime-specific sales across the entire carcass is warranted. In the past couple of years packers have added a growing list of cuts to their sales sheets specific to their Prime-graded product. This is evident in Certified Angus Beef ^® brand sales as we have seen the most recent year’s sales growth in the CAB^® Prime category.

Further opportunity exists to capture consumer demand across the Prime carcass as evidenced by the most recent USDA carcass cutout value report. For the first week in February, USDA lists the Prime cutout premium to Choice at $16.94/cwt. for the entire carcass. Yet, practically all of the premium is found in the rib primal which features a $73.17/cwt. premium, and loin at $39.36/cwt. Briskets have often carried a larger premium than at present, but very adequate supplies have narrowed that premium to $3.13/cwt. While Prime premiums are increasingly being captured on some cuts on both ends of the carcass, chuck and round summary values show relatively small premium contributions, as do the flank and plate.

It’s important to note that more demand for individual Prime grade cuts is being discovered on the part of packers and wholesalers as they educate downstream users about the opportunities to capitalize on growing Prime demand. Emphasis on greater utilization of Prime and CAB Prime carcasses is key to recapturing larger Prime cutout premiums that get allocated throughout the supply chain. After all, the economic drivers fueling current carcass weights and extended feedlot stays may shift over time such that carcass quality takes a step back. Even if not, building demand through exceptional quality is the factor that has allowed beef to vastly outpace other protein options in the market.

How Bullish is the Cattle Inventory Report for the Cattle Market?

Mon, 02 Feb 2026 10:30:16 GMT

USDA’s semi-annual cattle inventory report confirmed the smallest herd in 75 years.
This comes as the cattle industry is still healing from consecutive years of drought, but the surprise is that record high cattle prices aren’t enticing producers to rebuild.
The lack of herd rebuilding has likely extended the historically tight cattle numbers out an additional year.Which means these near to record cattle prices could linger into 2028.

Cattle Inventory Smallest Since 1951
USDA’s semi-annual cattle inventory report confirmed the U.S. cattle herd remains historically small, showing inventory at 86.2 million head, down 317,000 head from last year.

Patrick Linnell, Director of Market Research, CattleFax says: “The total cattle numbers came in down 0 .4 % from year ago, which does take total cattle numbers in the US down to the lowest level that it’s been since 1951. So it does just continue to decline cyclically. and i think that’s the big picture message of this report is that that that expansion while there was some signs of it within this report by and large expansion remains elusive at this point.”

Smaller Beef Cow Herd a Surprise
He says the biggest surprise in the report was a decline in beef cow numbers as the herd is now the smallest since 1961. (Graphic)
Linnell says, “As you looked at just how tight beef cow slaughter was this past year, us and other groups had expected that we would actually see an increase in the beef cow herd. Small, but an increase nonetheless. But however, that’s not what this report showed. It still showed beef cows coming in about 1 % smaller, down about 280 ,000 head.”

Factors Slowing Rebuilding
Linnell attributes the slow expansion to drought, age, lack of labor, higher interest rates, high market risk and financial rebuilding.
“You have a lot of producers who are opting to take the to take today’s paycheck instead of holding back that heifer and counting on returns for her in the future.”

Calf Crop Smallest Since 1941
The calf crop was also down 1.6% at 32.9 million head. The calf crop is the smallest since 1941 indicating the feeder cattle supply will remain tight for a while.”

Linnell says, “The calf crop did come in down about half a million head from year ago, the 2025 calf crop, that is. At the same time, feeder cattle and calf supplies, they continued their decline. 4:02 No surprise there, as you just think about, the multiple years, the continued declines in the calf crop, a slight uptick and heifer retention, and the continued lack of Mexican feeder cattle imports.”

Market Impact
So the cattle cycle isn’t even into the tightest numbers yet.So how long will cattle prices remain strong?
Linnell says, “Fewer potential breeding females coming into 2026 suggests that the calf crop is probably going to be steady to maybe a tick smaller again in 2026 and as you think about the tail of that you know it does suggest that that maybe into the tail of 27 but realistically it’s 2028 before you start seeing an increase in domestic and domestic fed cattle slaughter and domestic fed cattle supplies.”

The wild card is when the border reopens to Mexican cattle.But Linnell is optimistic the cattle market could retest the 2025 highs and stay strong another two to three years.

Top Producer of the Year Finalist: Dalton Farms

Thu, 29 Jan 2026 14:38:13 GMT

Dalton Farms of Wakeman, Ohio is a century farm that encompasses 2,000 acres of cropland where Edward and Rebecca Dalton grow corn, wheat, soybeans and spelt. The 2026 Top Producer of the Year award finalists also have a feeder to finish operation consisting of 400 head of Holstein steers they fatten out from about 300 lb. until finish.

For its success in the business of agriculture, Dalton Farms is a finalist for Top Producer of the Year, which is sponsored by BASF and Fendt. The awards banquet will take place, Feb. 9 as part of the 2026 Top Producer Summit.

From Tragedy to Triumph

Edward is the seventh-generation on this farm that split in 1990. He says it was a hard recovery requiring big sacrifices to keep the farm operating, but it allowed him to farm with his father until 2012.

“We farmed together for about seven years after college, so unfortunately my dad passed away of a heart attack,” Edward says. “And so at 27, Rebecca and I kind of took full responsibility of the farm.”

For eight years Rebecca juggled the farm, her career in nursing and family before pivoting.

“When we had our twin boys, I realized I wanted to be home more and be more involved in the farm,” she explains.

Family Centered Beef Business Emerges

That’s when the Daltons started selling their beef direct to consumers through their on-the-farm store called the Meat Barn.

“We started selling more freezer beef in halves and quarters, and that transitioned into smaller bundles for customers because they didn’t all want to buy in bulk,” Rebecca says. “That then turned into, can we get pork from you this way? Can we get chicken from you this way? And we started stocking more of those items.”

The Meat Barn sells products at 15 local gas stations and grocery stores. Plus, Rebecca is partnering with 30 other local farmers to provide the community with a variety of products sold at the Meat Barn and through farmers markets.

“We started just working with more local vendors to sell honey and maple syrup and popcorn and sauces and all of those things as well,” she says.

This has made the Meat Barn, and their farm, an agritourism outlet that focuses on direct-to-consumer goods, and they currently have a four month waitlist for halves and quarters.

“And we’ve added on multiple times already to help with that production, but the demand is there,” she says.

Rebecca says their customers like to know the farmer that produces their food, and Edward agrees that since COVID-19 the pendulum has swung back to consumers wanting to know more about their food supply.

“I think through this movement, people do care where their food comes from again,” he says. “They want to know the farmer and wanna know the story.”

Cattle Production Focused on Health and Efficiency

While the Daltons’ family-centered beef business focuses on consumers, Edward says they’re still pushing to reach their production goals in their cattle operation.

“We’re always trying to be as efficient as we can with feed rate of gain,” he says. “We’re not trying to always reinvent the wheel but making sure we’re not missing something. To just make sure our cattle are as healthy and as efficient as they can be because I truly believe the healthier they are from Day 1 until ending, the better product you end up with.”

The Daltons’ Laser Focus on Finances

From their beef and cattle business to grain farming, the Daltons track every aspect of their finances.

“We pay attention to everything is what we really try to do and try to be efficient with our money,” Edward says. “We don’t always have the latest and greatest of everything, but we try to be productive with everything we have.”

Transition From Organic to Commercial Grain Production

For the past several years, the Daltons grew organic grain, which helped them grow financially. However, Edward says last spring they made the difficult decision to switch those acres back to commercial grain production.

“We just couldn’t dedicate the time,” he says. “We were losing too much with our kids and with life experience and time we just could get back, and we chose the time with our family over being in the field.”

According to Edward, when it comes to grain production, efficiency is still their goal.

“Well, I’d always like to be more profitable per acre in our grain side, no matter what,” he says. “I think that’s probably a typical grain farmer, never satisfied no matter what.”

Building for the Future

The Daltons are proud of the financial progress they’ve made the past several years, such as adding employees to the team. Edward says he’s excited Rebecca can now be full time on the farm.

“Certainly, a milestone was being able to have my wife leave the hospital and come join us at the farm full time and have no off-the-farm income,” he says.

Rebecca says it’s a way to help preserve the legacy of Edward’s father and have it carry on through their sons.

“I definitely see our kids on this farm,” she says. “Whether it’s working the meat barn, I can’t tell you that, but I know that they will be a part of this farm, whether it’s row crop farming or raising cattle. I think that they would definitely have a part of the farm.”

Click here to register for the 2026 Top Producer Summit.

CAB Insider: Jan. 28

Thu, 29 Jan 2026 13:05:27 GMT

Starting with the Martin Luther King holiday, the federally inspected cattle harvest suffered a big setback last week, with the total reflecting a 10,000-head deficit compared to the Tuesday-Thursday totals. The winter storm in the South is noted as a slaughter-reduction impact on Friday, but the head count was just a few thousand short of recent Friday production totals, reflecting 35-hour week schedules.

Tyson’s published intention to close the Lexington, Neb., plant and remove one shift from the Amarillo, Texas, plant by January 20 caused another shift in the supply chain.

In fed cattle prices: Last week’s values were slightly stronger, with the top end of reported prices in the $236/cwt. range. The February Live Cattle contract was valued at $235/cwt. early this week and consequently provides no directional guidance beyond current spot market news.

(Certified Angus Beef)

Compared to analyst expectations, last Friday’s Cattle on Feed Report held no surprises, as the Jan. 1 head count was 3.2% below a year ago. The ninth consecutive month of year-on-year declines in placements saw December placements 5.4% smaller than in December 2024. The larger December marketing number, 1.8% higher than a year ago, reflects an additional marketing day in the month but a net daily marketing volume smaller than a year ago.

Carcass cutout values have primarily increased in January, although last week’s average CAB cutout value is shown as a few dollars cheaper as the quality spreads narrowed. It should be noted that Urner Barry’s $9.78/cwt. Choice/Select spread is double that of USDA’s reported value for the week. This is due to nuances in how the two entities capture and have the data weighted in the weekly information.

Seasonal Demand Shifts Carcass Values

As we wrap up January it’s apparent that the month’s carcass cutout values have held up quite well in relation to December values. Through last week, the CAB cutout price was just $3/cwt. cheaper than a month ago, by less than 1%. Evaluating the steer and heifer harvest totals shows much smaller weekly totals in January than in early December, creating a significant supply difference relative to demand.

We often discuss January as the lowest beef demand month of the year, while February likely vies for the second lowest, with the exception of a Valentine’s Day uptick. Also, we see a shift in consumer preference away from holiday middle meat roasts toward end cuts for “comfort food” meals.

Price adjustments across a variety of beef cuts are quite dramatic from the fourth quarter into the first quarter of the year. For instance, the wholesale price of the CAB lip-on ribeye roll has been 20% cheaper in the first quarter than it has been in the fourth quarter for the past five years. The January ribeye roll price downshift has been substantial with a 25% decline from the December average. This action has placed ribeye values slightly lower than in the previous three Januarys. The seasonal downturn for tenderloins is similarly sharp, with an 18% price decline from December to January.

(Certified Angus Beef)

So far, the characteristic January increase in demand for end cuts has occurred with all of the round primals either maintaining an elevated price or undergoing sharp increases. Roasting cuts from the chuck have also posted big increases, aligning with the expected January trend.

These shifts in demand affect price spreads based on carcass quality, as the cuts that command the highest per-pound premiums lose some seasonal demand through the first quarter. As cattlemen observe the current market there are questions about the decline in the Choice-Select spread and further premiums for CAB and Prime cutout values. Some have suggested that demand for premium Choice (CAB) and Prime carcasses is possibly waning. However, it’s perfectly natural this time of year as the total rib primal price drops from 170% of the cutout price to 125% and the loin drops from 132% to 126%. Meanwhile, the chuck has increased from 82% to 92% of the cutout price and the round elevated from 79% to 84% of the cutout in the December to January price changes.

Looking ahead to March, carcass quality grades should build toward the annual high percentages for the share of CAB and Prime carcasses. Potential to test or break recent records for high-quality grades is possible late in the first quarter. However, a very limited fed cattle harvest is at the top of the “issues” list during this period, so the likelihood of an overabundance of quality carcasses may very well be countered by small head counts. It promises to be an interesting season for premium beef supply.

Cattle on Feed Suggests Continuing Tight Supplies and Limited Heifer Retention

Mon, 26 Jan 2026 19:05:25 GMT

USDA released the January Cattle on Feed report on Friday, Jan. 23. These monthly reports estimate on-feed inventories for feedlots with capacity over 1,000 head, which represents more than 80% of total on-feed inventory in the U.S. As of Jan. 1, total on-feed inventory was estimated at 11.45 million head, which was down more than 3% from Jan. 1, 2025.

(USDA-NASS, Livestock Marketing Information Center)

Low domestic cattle inventory, combined with the ban on live cattle imports from Mexico, continue to keep cattle supplies tight. On-feed inventory has been running below year-ago levels since fall of 2024, and this was the largest year-over-year decline since that time.

Placements were the headliner of the report, and this has largely been the case for the last year. The number of cattle placed on feed during December of 2025 was down by more than 5% compared to December of 2024. This was largely anticipated, and the placement number came in at the upper end of a very wide range of pre-report estimates, but the number is still significant.

(USDA-NASS, Compiled by Livestock Marketing Information Center)

We were not importing live cattle from Mexico in December of 2024, so the 5% decrease is from a low baseline the previous year. December marketings were up 1.7% year-over-year, which was very close to pre-report estimates.

Nebraska continues to be the state with the largest number of cattle on feed, while Texas would be second. This shift has occurred due to the continued ban on cattle imports from Mexico.

(USDA-NASS, Compiled by Livestock Marketing Information Center)

Friday’s report also included an estimate of the steer/heifer breakdown. The number of heifers on feed provides an indication of heifer retention, so analysts have been watching this number closely. In Friday’s report, both steers and heifers on feed were down roughly 3% from January 2025. As a percentage of total on-feed inventory, heifers accounted for 38.7%. This is about 0.6% higher than Oct. 1 and virtually unchanged from last January. This suggests relatively low levels of heifer retention at present.

More will be known about heifer retention and many other trends when USDA releases the January cattle inventory report on January 30. During 2025, beef cow slaughter was down by more than 500,000 head. For that reason alone, a small increase in beef cow numbers would seem likely. And while heifer retention does not appear to be occurring at a large scale, a small increase in the number of heifers held for beef cow replacement would not be surprising. Still, the pace of beef cow herd expansion in the coming years is likely to be slower than past cattle cycles.

Your Next Read: Cattle Rally on Higher Cash, Trumping COF: Tightest Numbers Ahead

Tightest Cattle Supply Predicted in The Next 60 to 90 Days

Fri, 23 Jan 2026 17:56:31 GMT

While fundamentals continue to drive the cattle market, increasing prevalence of external factors can play havoc day-to-day.

Based on placements the past six months, Brad Kooima of Kooima Kooima Varilek believes the tightest supply of this entire cattle cycle will occur in the next 60 to 90 days. It wouldn’t be the first-time the market makes a high in February or March.

“Now beyond that, I don’t see there’s a tremendous chance to have an oversupply of cattle going into the summer,” he adds. “However, you’ve got things like the Mexican border that are coming into play. So, I’m trying to react to what I see, but the fundamentals aren’t going to change.”

Here are seven other takeaways from Kooima’s recent conversation with Chip Flory on AgriTalk:

1. Fundamentals Still Drive The Cattle Market.

“I wish we could just talk about cattle fundamentals,” he says. “I’m still an old-school fundamentalist who believes a lot in trying to figure out where we’re at with supply and how we’re getting along with the boxes and beef demand.”

Rumors and misguided comments, such as the New World screwworm (NWS) scare a week ago and geopolitical factors this past Tuesday, can cause the markets to react.

“Now, is it only supply? Of course not,” Kooima says, regarding what drives the markets. “But if I had to start there, barring more of this outside, new stuff we’ve been inundated with, I think the market still generally driving the deal. We don’t have enough cattle, and that’s why they’re cutting kill. That’s why they’re closing plants. There’s not enough to go around.”

2. Heifer Retention Exists But Isn’t a Major Market Factor.

Kooima says heifer retention has started but is insufficient to significantly change the supply trajectory.

“It’s not like 2015 when we flipped a switch and the whole world decided to save them at one time, but it’s there,” he says.

He’s predicting a 1% to 2% increase, saying the retention is regional — referring to the Dakotas, Montana and Colorado.

“What’s driving it is economics,” Kooima says. Some ranchers can’t afford to not sell their heifer calves, while other factors include the age of the rancher, no desire to deal with first-calf heifers and drought.

When asked if there is enough heifer retention to move the needle to bring some relief on the supply side, Kooima responds: “The short answer would be no. We’re never going to have a cow herd like we had 10 years ago. We’re going to have to figure out how to do with less.”

He says the strategy to increase supply is feeding to heavier weights and the growth in beef-on-dairy.

“The gorilla in the room, to me, is beef-on-dairy,” he says. “From a couple of standpoints, just from a raw supply standpoint, the dairy cow herd’s the biggest since 1993. It’s grown and grown, and why wouldn’t you if you can get $1,200 to $1,500 for a day-old calf?”

3. Mexico Has Built Feeding and Processing Infrastructure in Response to Border Closure.

Kooima says with the U.S.-Mexico border closed due to NWS, Mexico has figured out how to finish and process cattle.

“I think there’s a lot of people there who don’t want anything to happen,” he says, regarding reopening the border. “They’re benefiting from this great big bull market and now they’re selling the beef to us. So, it may never exactly be the way it was again. They waited too long on this matter, in my opinion. It’s not a market factor.”

4. Beef-on-Dairy and Vertical Integration Are Rising Concerns.

Kooima shares his concern about the long-term implications of vertical integration and the consequences of the growing beef-on-dairy supply.

“For the first time, you got an integrator that has the ability to control that thing from its birthday and schedule it out 341 days later to slaughter,” he explains. “A dream that the packers chase. I watched them wreck the hog market. I see what happened in poultry. This scares me to death. The combination of all of that is we’re losing price discovery. They’re going to try to slow it down as much as they can until they can control the supply.”

5. Packers Are Adapting to the Market.

Kooima says the closing of Tyson’s Lexington plant and shift reduction at its Amarillo plant are examples of the broad industry trend to reduce harvest rates and shutter facilities when supplies tighten. He explains the closing will result in even less negotiated trade. The Lexington plant primarily did formula (non-negotiated) pricing, and he predicts those formula customers will now go to Tyson’s Dakota City plant.

“Dakota City, a plant that’s closest to me, 64 miles away, is likely going to become a formula plant. It’s going to further deteriorate price discovery up in this neck of the woods,” he stresses.

He adds packers are also using tight supplies as an opportunity to perform necessary cooler clean-out cycles and reduce the number of harvest days per week.

“They’re systematically reducing kill to try to gain some leverage back,” Kooima says.

When it comes to regional packers, he hopes they can survive: “I think they’re critical to price discovery.”

6. Demand for Beef Remains Strong.

Kooima is bullish about beef demand, especially amid supply tightness.

“When people say demand is pretty good, I go ‘No, it is phenomenal,’” he says. “The demand for grind is crazy. We have to make sure we can continue to fuel that rocket.”

7. Risk Management is Essential Amid Market Uncertainty.

On protecting against risk, Kooima advises: “My mantra is and has been for a year and a half to buy some puts. You’re going to have to buy puts to keep you in business. Let’s not let 2015 happen to us again.”

He goes on to add: “Do I think that there’s a high-risk point here in the short term? No, obviously, I just said I think we’ve got the tightest numbers ever, but there’s always something that can go wrong, so be careful.”

Listen to Kooima’s and Flory’s AgriTalk conversation here:

Your Next Read — Shrinking Slaughter Capacity: What’s Next in 2026?

CAB Insider: Market Update Jan. 14

Thu, 15 Jan 2026 03:55:44 GMT

As we wrapped up 2025 and the calendar turned to 2026, two holiday-shortened weeks of federally inspected cattle harvest pulled head counts down to 425,000 head and 474,000 head. Last week’s 553,000 head was not a decisive return to pre-holiday volume as the week’s total was the second smallest since mid-October.

Fed steer and heifer volume was 445,000 head, compared to 4th quarter non-holiday weekly averages of 464,000 head and all 4th quarter weeks at 436,000 head. Looking to the first quarter, feedlot turnover rates should continue on a slow pace with added days on feed remaining a theme, and the expectation is for smaller weekly totals. Assuming the U.S. border reopens, CattleFax is projecting a 600,000 head decline in fed cattle harvest for the year. That eventuality is not a given, while a change to the current policy would not increase fed cattle supply until the second half of the year.

Adding disincentive to increase production volume, packer margins are estimated to be at more than $200 per head in the red, according to latest reports.

(Certified Angus Beef)

The comprehensive carcass cutout value began the year with the first week’s average at $353/cwt., 8% higher than the January 2025 average. The first three full weeks of 2025 featured fed cattle harvest volume of 485,000 head. Continuation of smaller weekly head counts is likely to hold wholesale boxed beef prices on a higher plane.

Mid-way into January, seasonal focus has shifted from middle meats toward the more favored winter end-meat roasting cuts. Wholesale cut prices are reflecting major downward corrections with ribeyes and tenderloins dipping below spot prices of the last two years. It’s yet to be seen if retailers will take advantage of the opportunty to buy a volume in the spot market to entice consumers to the meat case.

Price Speaks Volumes

Whether it’s calves, fed cattle or boxed beef, staying current with relevant price information has been an everyday task in the beef sector. Volatility is a tired term in the modern era, even with the exclusion of major industry news.

Running headlong into 2026, the cattle market is ablaze with feeder cattle generating a highlight reel of prices in the first two weeks of January. It’s as if the industry awoke on Jan. 1 to realize that projected declines in feeder calf supplies were suddenly truthful.

On the the end-product side of the equation, there have been recent seasonal undulations as new record carcass weights were charted — accompanied by a record share of 87% Choice and Prime carcasses for the past four weeks. Certified Angus Beef^® brand certification has been steady for the period, near 37% of Angus-type carcasses qualifying. As carcass weights touched new records in the fourth quarter, a disproportional number of those were excluded from the brand as they exceeded 1,100-lb. weight limit specification.

With USDA Prime carcass tonnage (including CAB^® Prime) record-large again in 2025 we revisit price spreads up and down the quality grade and branded product offering. Even as Prime carcass supply increased 11% on the year, the annual average Prime premium increased to $39.04/cwt.above commodity Choice, up $4.72/cwt. for the year. The record $56.21/cwt. annual Prime premium, set in 2022, is unlikely to be tested again anytime soon.

(USDA, Urner Barry)

CAB carcass counts were the fifth largest in brand history for the fiscal 2025 and just 3% fewer than a year ago on the calendar year. Yet the year’s advance of $5.59/cwt. in the cutout premium for traditional CAB carcasses was up 36% over 2024 to average $20.73/cwt. according to Urner Barry.

Calculated Select carcass tonnage slipped 9% on the year while the discount deepened from $17.04/cwt. to average $21.33/cwt. Recent seasonality has brought focus to the Choice/Select spread dipping briefly below $1/cwt. in early January. However, the year-long trend brings to light the big picture of further demand destruction for Select carcasses even as they are less prevalent in the supply chain.

The strong price spread trend is a clear indicator for the industry in 2026. While the tightest fed cattle supplies in the cycle are projected this year, consumer demand has issued directional support that tight supplies do not necessitate narrowing of price differentiation for quality. Importantly, more and more retail and foodservice firms are grasping that a satisfied beef customer is a loyal customer. That starts with a marbling-rich carcass meeting specifications.

Tyson's Lexington Beef Plant Shutters Early: No Shifts Scheduled This Week

Mon, 12 Jan 2026 15:19:04 GMT

In November, Tyson Foods announced plans to permanently close its Lexington processing plant on Jan. 20. The announcement shocked the beef industry and specifically the town of Lexington, Neb.

A University of Nebraska-Lincoln (UNL) analysis estimates the annual statewide economic impact of the closure will be $3.28 billion.

The beef plant, which opened in 1990, was one of the largest in the nation. According to UNL the plant employs approximately 3,200 team members and has the capacity to slaughter 5,000 cattle per day, which equates to about 4.8% of total daily U.S. beef slaughter.

Read more:
What Does Tyson’s Announcement Mean to Beef Producers?

Sources told Farm Journal late last week, Tyson has not scheduled any shifts at the Lexington facility the week of Jan. 16.

Expected Economic Impact

The closure of the beef plant will be one of the biggest shocks in history for the small town Lexington, which is home to about 11,000 people. However, the ripple effect will be felt throughout the Nebraska economy.

According to the UNL analysis, total labor income losses from the closure are projected to be $530.43 million per year across 7,003 jobs. Of those, 3,212 are positions directly eliminated at the plant, with the remainder representing additional jobs that support the workers in other sectors

UNL expects a substantial reduction of tax revenues in the aftermath of the closure. Annual losses in state personal income tax revenue are estimated at $23.2 million. State sales tax revenues are projected to decline by $10.16 million per year, and local sales tax revenues accruing to Dawson County are expected to fall by $2.77 million per year.

Conducting the analysis was Eric Thompson, UNL economics professor, and Elliott Dennis, UNL associate professor livestock marketing and risk management.

“These impacts would be larger if a greater share of cattle processed at the plant were purchased from Nebraska feedlots or if cattle accounted for a larger proportion of total plant costs,” they explain. “Conversely, the estimated impact would be smaller if the total value of beef sold were lower. Tax rates are based on historical tax data and may vary from year to year depending on employee deductions and other factors.”

What Keeps Beef Producers Up at Night?

Wed, 31 Dec 2025 16:08:01 GMT

Worry — it is an anxious way of thinking. It usually involves thoughts about what bad things might happen in the future and if you can cope with them.

In the beef industry, the list of things producers and stakeholders worry or stress about can be long and exhaustive.

Here’s a list of some of those key stressors keeping producers up at night:

1. Fear of Animal Diseases

Troy Rowan, University of Tennessee assistant professor, summarizes: “As with most folks, I’m concerned about emerging animal diseases like New World screwworm (NWS) and foot-and-mouth disease, and the cascading impacts they could have on the industry.”

Texas beef producer Donnell Brown agrees a top concern on his mind is NWS.

“As temperatures rise this spring and fly season begins again, I am deeply concerned that we could see an outbreak with devastating consequences for livestock and wildlife,” Brown says. “We still lack practical ways to treat or protect wildlife. After the screwworms were eradicated in the 1970s, it was 15 years before I remember seeing deer on our ranch. Today, deer are abundant and hunting has become a major economic driver for ranchers and rural communities. If screwworms cause significant wildlife losses, the ripple effects would be severe.”

Colin Woodall, CEO of the National Cattlemen’s Beef Association (NCBA), says the top five thing that keep him up at night are: “Foot-and-mouth disease, foot-and-mouth disease, foot-and-mouth disease, foot-and-mouth disease and foot-and-mouth disease.”

He explains: “We have a lot of good things that are going on, and yes, we spend a lot of time talking about New World screwworm, but we have the tools able to address New World screwworm. Foot-and-mouth disease is still kind of that unknown, and we understand that in working with the Federal Bureau of Investigation, they know they have proof that terror groups around the country have access to the foot-and-mouth disease virus, and that a pin full is all they need to be able to come in and absolutely send our market into chaos — our industry into chaos, our food supply into chaos and the economics around all of those into chaos.”

He says that fact is why NCBA spends so much time working with USDA, state associations like KLA and state animal health officials to make sure the industry is prepared in the event we have reintroduction of foot-and-mouth disease.

“We haven’t had it since 1929 but it’s going to come again, and NCBA is spending it just about every waiting moment we can to make sure we’re prepared,” Woodall says.

Ron Lemenager, Purdue University beef specialist, adds, “I worry about when, not if, a disease like foot-and-mouth will be introduced that will cripple our markets and supply chain.”

Lemenager agrees NWS is a concern, but in his part of the country a bigger concern is the Asian Longhorned Tick and Theileria.

Check out these related articles:
Foot And Mouth Disease: Producers Should Be Prepared
The Smell You’ll Never Forget: A Calf Infested with New World Screwworm
Protect Your Livestock: Signs of New World Screwworm
5 Livestock Diseases That Could Impact U.S. Food Security and Economic Stability
Theileria and the Asian Longhorned Tick: What Beef Producers Need to Know

2. Weather Challenges

Kansas beef producer Debbie Lyons-Blythe says there are a number of challenges that worry her family.

“No. 1 is Mother Nature,” she says. “Everything we do day-to-day and long-term is tied to weather. Even the markets are tied to what Mother Nature is doing across the nation.”

Cyndi Van Newkirk of Van Newkirk Herefords agrees weather is a big stressor for her family who are seedstock producers in the Nebraska Sandhills.

Lemenager says with multiple years of short rainfall in a number of different areas he is concerned with drought and that impact on corn, bean and hay prices as well as hay availability.

“The variability in the weather and the marketplace are always concerns to worry about,” he adds.

Cattle producer and extension educator Shad Marston from Canton, Kan., says the possibility of extreme severe weather is what keeps him up at night.

“Two years ago in January, we had a really cold week, right at our beginning of the calving season. We only had three calves on the ground,” he remembers. “The temperatures were well below our normal cold temperatures, and the snow created it hard to even get out of the house. We never lost any cattle or calves, but that week was a challenge. Everything on our ranch froze up — waters, tractor and skid steer. We only had one truck running and it just had a flatbed on it with no bale bed.”

Marston says they had to haul small square bales to the cows from the barn for two days until a neighbor came and loaded round bales on the flatbed to take to the cows.

“We parked on top of the hill and let the bales roll off and down the small hill for the cows to eat and bed down on. A couple of times, we had to tie the bales to a tree to get them off the flat bed. We could not risk getting the truck stuck, because that’s all we had to feed them with, and very few neighbors were able to help if anyone had problems,” he describes. “I remember lying in bed at night wondering if we were going to make it the next day. We could of easily lost some of the cattle. So being prepared is my worst fear and I’ve tried to always have a plan for the worst. Extra feed on hand, fuel additive in equipment and enough supplies on hand to make it if we can’t get to town for a week are lessons we have learned the hard way.”

Check out these related articles:
Ranching Parched Land: Strategies for Drought Resilience
Avoiding The Calfcicle: Calving in Winter Weather
Ranchers Make Tough Decisions to Weather Intense Southwest Drought
Weather Swings Bring Mud and Concerns About Calf Health
Normal La Niña Pattern to Return By Thanksgiving

3. The Cattle Market

For South Dakota cattle producer Ken Odde, he says what keeps him up at night is anything that might “crash the market.”

“I am thinking about both fed cattle and feeder cattle markets,” Odde explains. “Foot-and-mouth disease is high on the list for me, and it doesn’t seem to get much attention recently.”

Van Newkirk agrees the markets and overthinking market swings are a concern.

Check out these related articles:
What Does the Bullish Cattle on Feed Report Mean for the Beef Industry in 2026?
Uncertainty: The Word of 2025 for the Cattle Market
$4 Feeder Cattle: Dream or Reality?
Cattle Market Roller Coaster Continues: Mexican Ag Minister Announces U.S. Visit to Discuss Border Opening
Navigate Market Volatility with Risk Management Strategies

4. Beef Supply and Consumer Demand

“We had the smallest calf crop since 1941,” says Ron Lemenager, Purdue University beef specialist. “Put that with the closure of the Mexico border due to New World screwworm and we have a limited supply. As a producer I like the higher prices, but from a consumer standpoint, at what point are they going to walk away from beef and go to chicken or some other protein source.”

Brown explains supply and demand ultimately govern this market.

“If we lose feedyards and packing capacity, we weaken the demand side of the equation,” he says. “Over time, that reduced demand would place downward pressure on feeder cattle prices, undermining the very producers who are benefiting from today’s high prices.”

Jason Warner, Kansas State University cow-calf extension specialist, says: “In the short term, I am concerned about what could happen to the beef industry if there is a major drop in consumer demand for beef, and the potential ramifications to the cow-calf producer if calf prices substantially drop considering how high cow/heifer prices are right now. I think knowing cow production costs will be important going forward.”

Woodall summarizes consumer sentiment remains the bedrock of the industry’s success.

“As long as the consumer is with us, as long as they are choosing to buy beef, then we have a bright future,” he says.

Woodall credits generations of producers for bolstering herd quality and producing a product people want, not just need, to buy.

Check out these related articles:
Consumer Craze for Protein Drives Beef Demand
Beef Industry Chaos: Tight Supplies, Strong Consumer Demand and Political Interference
What Does Talk of $10 Ground Beef Mean to Producers?
How Many Minutes Does a Consumer Have to Work to Buy A Pound of Ground Beef?

5. Government Interference

Lyons-Blythe says another concern is government interference in market disruptions and environmental regulations.

Woodall adds we need to keep the government out of the cattle market.

“We want to be able to grow this industry,” Woodall says. “As producers, one of the best things you can do is call your member of Congress, call your two senators, and tell them to be advocates for us. We don’t need new programs. We don’t need a return of things like mandatory country of origin labeling. We simply need the government to stay out of the marketplace.”

Check out these related articles:
Did the Administration’s Plan to Lower Beef Prices Wreck the Bull Run in the Cattle Market?
Beef Producers React to USDA’s Plan to Fortify Industry and Trump’s Social Media Comments
USDA Has No Plans for Financial Incentives to Rebuild Cattle Herd

Other Industry Challenges

“One other thing that concerns me is the closing of some of our packing plants,” Lemenager says. “While I understand they need a steady supply of cattle to cover their overhead costs, but will they ramp back up when cattle numbers return?”

Lyons-Blythe says a local concern is the invasion of the cedar tree into the Flint Hills.

“I think in the last 30 years, we have seen such a tremendous encroachment and a lot of the prairie lost due to the cedar tree,” she explains.

Rowan, a beef cattle geneticist adds: “From a genetics perspective, I’m constantly thinking about how we will deal with the antagonisms between growth and carcass weight and grazing cow efficiency.”

Van Newkirk explains family dynamics is another challenge multi-generational beef producers face.

Check out these related articles:
Shrinking Slaughter Capacity: What’s Next in 2026?
Prescribed Burns: Keeping the Prairie Alive; Preventing Wildfires
CattleFax Predicts Profitability Despite Increased Uncertainty
Impacts of Heavier Carcass Weights
Back to the Basics: Terminal Crossbreeding Bridges Cow-Calf Efficiency and Carcass Value
5 Steps to Successful Transition Planning
How to Find Peace During Generational Transitions

Lyons-Blythe says when asking her sons what keeps them up at night their response is the upcoming calving season.

“It not only keeps them up, but it gets them up as they check heifers all night and day,” she says.

Don’t worry, we’ll tackle that challenge next week with our calving preparation blitz week on Drovers.com.

Shrinking Slaughter Capacity: What's Next in 2026?

Wed, 24 Dec 2025 16:36:47 GMT

The long-feared rightsizing of shackle spaces to more closely match the number of cattle has begun.

“The market’s reaction to the November announcement was a good reminder that market volatility still exists even when the supply and demand fundamentals continue to be positive forces into the start of 2026,” says Dave Weaber, Terrain senior animal protein analyst, in his Q1 2026 Outlook .

In late November, Tyson Foods announced its plan to end operations at its Lexington, Neb., beef facility and convert its Amarillo, Texas, beef facility to a single, full-capacity shift.

“Terrain estimates the changes will eventually reduce U.S. slaughter capacity by about 6.6%,” Weaber explains. “However, slaughter plant capacity utilization is still nearly 6% behind historical norms, as the number of cattle is still well short of filling available slaughter capacity.”

Weaber predicts this positive shift in operational efficiency will likely encourage plants to fill available capacity and better compete for the available cattle.

“I expect utilization to decline by about 2% during 2026 when two new plants in Nebraska and Missouri complete their startups,” he adds.

A proposed plant in the Panhandle of Texas that would handle 6,000 head per day has the potential to lower utilization rates back to early-2025 levels if completed.

“Even without additional future slaughter capacity, utilization rates will remain low; fed cattle numbers are expected to decline during the next two to three years because of cow-calf producers’ beef cow herd expansion efforts,” Weaber summarizes.

The reduction in current fed slaughter capacity will help the remaining plants run more volume, improving efficiency by spreading fixed and semi-variable costs across more head and pounds of beef. This positive shift in operational efficiency will likely encourage plants to fill available capacity and better compete for the available cattle.

“I expect that in the near and intermediate term, this effect will at least partially offset the shift in market leverage, which currently favors the packer,” Weaber says.

Markets and Beef Prices Remain Resilient

Beyond the near-term impacts to futures traders’ sentiment, the market impacts of the announced closures are fading.

“Calf, feeder cattle and fed cattle cash markets are already recovering and have posted significant rallies,” Weaber says. “Fed cattle supplies for the first half of 2026 are not going to change. The number of cattle placed into feed yards is the number placed and will be the number that gets slaughtered. The location the cattle get processed into beef may change, but overall beef production is mostly set.”

(USDA NASS, Terrain)

He adds: “ Consumer beef demand and spending remain strong and supportive of cattle prices. Presidential and executive branch rhetoric about lowering beef prices has had little to no impact on retail and wholesale beef prices. Tariff reductions on imported lean trimmings from South America are driving volumes, but prices for contracted loads delivering in the first quarter of 2026 are record high, up 20% from a year earlier.”

“I expect the choice cutout to average between $375 per cwt and $385 per cwt and fed cattle prices to average between $234 per cwt and $238 per cwt in Q1.”

— Dave Weaber

Q1 2026 Price Outlook

“I expect available fed cattle supplies during the first quarter of 2026 to be 6% to 7% smaller than the year prior,” Weaber says. “Even with a 2% shift in leverage (fed cattle price to comprehensive cutout) to the packers’ favor, I expect the Choice cutout to average between $375 per cwt and $385 per cwt and fed cattle prices to average between $234 per cwt and $238 per cwt in Q1.”

By early December, light feeder cattle and calf auction prices have recovered much of the losses incurred since late October and appear poised to start 2026 at record levels.

“Changes to the U.S.-Mexico border status remain the greatest known risk for cattle prices,” Weaber stresses.

Further rallies in deferred live cattle futures will drive the balance of the recovery in prices for heavy feeder cattle that make up the CME feeder cattle price index. He explains demand for light cattle to be turned out on wheat pasture and California coastal range has been a key driver for the rally in light cattle.

Biggest Risk Is South of the Border

Changes to the U.S.-Mexico border status remain the greatest known risk for cattle prices.

“The Mexican government has implemented broad cattle movement and import restrictions within the country as well as greater fly control measures in partnership with the USDA,” Weaber says. “Meanwhile, U.S. and Mexican officials have begun inspections of only one border crossing into New Mexico. Additional cases of New World screwworm have been found in Mexico, which I expect to further delay the reopening.”

Active risk management to preserve operation equity should remain a priority.

“If the border were to reopen, cash feeder cattle and calf prices and feeder cattle and live cattle futures would be the first to move down,” Weaber explains. “The magnitude of the impact will depend on the rate-limiting and cost impacts of the protocols that are implemented and the number of backlogged cattle south of the border.”

One Lesson From Plant Closures

“If we’ve learned anything from the market reactions to the plant announcements, it’s that price volatility should be a focus for producers in all segments of the cattle industry,” Weaber says. “Active risk management to preserve operation equity should remain a priority.”

Your Next Reads:
Navigate Market Volatility with Risk Management Strategies

Beef’s Future: Consumer Demand, Risk Management and the Path to Continued Profitability

What Does the Bullish Cattle on Feed Report Mean for the Beef Industry in 2026?

Mon, 22 Dec 2025 17:41:12 GMT

Another bullish Cattle on Feed Report was released Friday. Tight cattle numbers persist as the industry deals with record low placements and near record low marketings.

Derrell Peel, Oklahoma State University Extension livestock marketing specialist, predicts “feedlot inventories will decrease more and faster in the coming months.”

David Anderson, Texas A&M Extension economist, summarizes the report indicates more of the same.

“We’ll start the new year on the same trajectory — fewer cattle on feed,” he says. “It might suggest that the trajectory might be picking up some speed with cattle on feed being down maybe just a little more than it has been.”

Other key factors going forward, according to Anderson include:

Heifer retention for herd rebuilding will be a big impact on on-feed numbers.
The recent new record large dressed weights reflect the numbers of days on feed, lower feed costs, good animal performance because of good weather.

“There is sure a bunch of interesting stuff going on for the new year,” he summarizes.

(USDA National Agricultural Statistics Service)

The December report showed cattle and calves on feed in large feedlots (greater than 1,000 head) totaled 11.727 million head on Dec. 1. USDA livestock analyst Michael McConnell says inventory levels are getting tighter — 2% lower than a year ago.

“That’s mainly the result of relatively tight cattle supplies that we have in the United States,” he explains. “It’s also been particularly exacerbated by the lack of cattle imports coming in from Mexico due to concerns about the New World screwworm cases that have occurred in Mexico. That shows up in the Cattle on Feed Report with particularly tight supplies in the southern feeding regions, particularly places like Texas, Oklahoma and Colorado.”

Peel says feedlot inventories have declined year over year for 13 consecutive months, leading to a 12-month moving average total the lowest since October 2018. Average feedlot inventories have declined 3.6% from the peak in September 2022.

Anderson says the wild card continues to be imports from Mexico. “Now we will comparing cattle on feed to a year ago that will reflect no imports of feeder cattle. I think that will be an important distinction in interpreting the report going forward.”

(USDA National Agricultural Statistics Service)

According to USDA, placements at feedlots were down 11% from this same time in 2024 and at 1.6 million head, the lowest for November since the series began in 1996.

During November, placements of cattle and calves weighing less than 600 lb. were 435,000 head; 600 lb. to 699 lb. were 375,000 head; 700 lb. to 799 lb. were 320,000 head; 800 lb. to 899 lb. were 255,000 head; 900 lb. to 999 lb. were 130,000 head; and 1,000 lb. and greater were 80,000 head.

Table 1. December Cattle on Feed and June Through November Placements

State	COF December	% Change YOY	June–November Placements	% Change YOY
	1000 Head		1000 Head
Nebraska	2670	+2.7	2880	-7.2
Texas	2610	-9.4	2015	-16.2
Kansas	2440	+0.8	2510	-5.6
Colorado	910	-14.2	755	-21.8
Iowa	700	+6.1	454	+4.1
California	495	-2.9	345	+1.2
Idaho	345	+4.5	278	+1.5
Oklahoma	340	-6.8	275	-11.6

U.S.	11727	-2.1	10475	-8.6

“The regional changes are significant,” Peel says. “Feedlot inventories in Texas have been smaller than Nebraska the past two months, which has only happened a few times since 1971. Table 1 shows the current on-feed inventories and feedlot placement totals the past six months for the top eight cattle feeding states. Placements have decreased 16.2% year over year in Texas compared to 7.2% in Nebraska. December feedlot inventories are down 9.4% in Texas but actually up 2.7% year over year in Nebraska. Colorado, the No. 4 cattle feeding state, has also dropped sharply with the six-month total of placements down 21.8% and the on-feed total for December down 14.2% compared to last year.”

(USDA National Agricultural Statistics Service)

Marketings were down 12% from a year ago at 1.52 million head, which is the second-lowest marketing number since 1996.

According to Pro Farmer’s Bill Watts , the report came after a strong finish to a winning week for cattle. February live cattle futures rose $2.40 to $230.80, hitting a seven-week high. For the week, February live cattle rose $1.25. January feeder cattle futures gained $5.325 to $345.60, also hitting a seven-week high and posting a weekly gain of $6.50.

Farm Journal’s Michelle Rook reports Monday morning, live and feeder cattle futures made new highs. Rich Nelson of Allendale, Inc., discusses the Cattle on Feed Report with Rook during the Markets Now Early segment saying the big catalyst is the bullish Cattle on Feed Report.

“We’ve got eight months in a row of lower-than-last-year placements,” Nelson summarizes. “They were at about 7% below last year’s level, so the period from now through early summer will be a little tighter supply, as far as from a feedlot perspective.”

Despite this bullish backdrop, Nelson cautions some of the optimism in the cattle market has been tempered by packer-led declines in slaughter numbers. He notes that, while supply constraints create opportunities for higher prices, packers have responded by reducing slaughter rates, which can dampen the effect of these bullish supply indicators.

He emphasizes the importance of monitoring how packers navigate the tightening feedlot supply situation over the coming months, as their response will be central to both supply and pricing outlooks.

Your Next Read: Cattle Hit Fresh Highs on Bullish COF but Can it Continue? Grains Also Rally Monday

CAB Insider: Market Update Dec. 10

Thu, 11 Dec 2025 03:40:28 GMT

The fed cattle trade has undergone a tumultuous ride in the past two months. Weekly fed steer prices averaged $237/cwt. the second week in October, then rapidly declined $28/cwt. by the third week in November.

Last week’s trade featured a sizeable recovery with the five-area steer average up $10/cwt., landing at $221/cwt. with prices as high as $226/cwt. in Kansas. Cash trade was limited to fewer than three packers in Texas, triggering confidentiality rules by USDA regulations. This rule is typically only triggered in the Colorado region where it’s the norm for trade to be reported for just two packers.

The total harvested head count was dramatically higher last week as the 600,000 head eclipsed the prior week’s holiday schedule by 102,000 head. Before last week’s strong upward move in the spot cash cattle price, packer margins were calculated somewhere north of $50/head.

This helped to incentivize packers to ramp up harvest levels, coupled with the increased volume needed to fulfill pre-holiday grocery store beef obligations. The cattle price recovery quickly wiped out much of the packer margin, setting that closer to breakeven as this week got underway.

(Certified Angus Beef)

Carcass cutout values began December with a cheapening trend in continuation of the downward pattern established at the beginning of November. Many observers are decrying weakening beef demand due to the lower price trend. However, softer cutout values were recorded for the month of November in four out of five of the last four years, with the exception of 2024. December price trends are mixed in the last five years with 2022 and 2024 charting higher prices and the remaining three years trending lower.

Cutout price spreads are mixed with the CAB premium above Choice at a very reasonable $16.81/cwt., down $3/cwt. last week. The Choice/Select spread remains relatively wide at $20.06/cwt. in Urner Barry’s data last week. This level is much lower than a year ago, as the Select grade share of fed cattle has slipped to just 10.9% of the carcass supply. Customers for Select grade product are finding their orders shorted while distributors have told them to get on board with “at least” USDA Choice moving forward.

Big Shifts in Quality Grades

The 2025 quality grade trend tracked the USDA Prime grade a full percentage point higher than the prior year through August, averaging 11.5%. Since then, the Prime grade trend has defied seasonal expectations, normally setting a course toward a fall low in both Choice and Prime grade percentages. Instead, the Prime share steadily increased in a punctuated departure to the upside, averaging 12.1% since August.

While the unseasonal swing to the upside is impressive, the past four weeks of data add more emphasis to the chart. In November, Nebraska packers harvested three weeks of cattle above 14% Prime with the final week spiking to 17.2%. This stands to reason as the northern feeding region is currently carrying the most market-ready supply of cattle with the heaviest carcass weights, indicating that days on feed are pushing grade upward. Record-heavy industry carcass weights are a nationwide trend, but led by northern cattle.

On the other hand, Texas feedyards currently have the least occupancy with their cattle inventory hindered by the absence of Mexican cattle. Even so, the Texas grade trend is also charting much richer this season. While the state’s Prime grade is exceptional compared to history, averaging 7.8% since June, the uptrend in USDA Choice is notable. The Texas Choice grade average moved little on either side of 64% through October this year. Yet the last four weeks saw Choice carcasses jump to average almost 69% of the total, while the Prime share gave no ground, averaging 8.1% in the past month.

(Certified Angus Beef)

A combination of factors in Texas creates ample cause for the richer grade trend. First, the average Mexican feeder cattle supply has lower genetic potential for marbling. Absence of these cattle in the current Texas carcass mix easily pushes quality grade higher in the state. As well, the increase in beef x dairy cattle over the past several years has brought the grade higher with refined terminal genetics introduced through this substantial Texas cattle supply. Finally, it’s understood that some northern cattle are shipping to Texas to be harvested as the northern feedlot sector is heavy on market-ready head counts.

A larger share of Upper 2/3’s Choice and Prime carcasses in the Angus-type cattle supply is also helping to hold the CAB carcass certification rate a percentage point higher than a year ago, averaging 36% for the past six weeks. Record-heavy carcass weights featuring average steer carcasses at 988 lb. are keeping a lid on brand acceptance rates. While richer average marbling across the weekly fed harvest suggests we should see even higher brand acceptance rates, there has been an increase in carcasses disqualified because they exceed the brand’s maximum 1,100 lb. carcass weight.

Do Packers Control Cattle and Beef Prices?

Fri, 05 Dec 2025 17:34:20 GMT

This is the next in the series explaining the accusations against the beef packers.

Opening Statements

Charge (Media/Prosecution): The Big 4 suppress cattle bids in a thin cash market, underpay farmers and ranchers, and control what consumers pay for beef.

Defense (Packers): Cash trade shows breathing competition, not lockstep pricing. The beef dollar split does not evidence packer capture, and retail prices are formed largely downstream while wholesale formulas reference negotiated trade.

Ground Rules

Relevant market.

Media: Fed-cattle cash trade is thin; formulas magnify any move.
Packers: Price discovery occurs in regional draw areas; wholesale formulas are anchored to negotiated prices, not unilateral lists.

Burden of proof. Durable market power must appear in outcomes — persistently tight bid ranges, a rising packer take of the beef dollar, and wholesale/retail pricing detached from negotiated bases.

Facts Not in Dispute

Fed-cattle concentration is high.
Wholesale formulas have grown as a share of boxed beef sales.
Negotiated trade (both cattle and wholesale) still exists and is the pricing reference for formulas.

The Media’s Case (Defendant)

Count 1 — Thin cash lets packers control cattle prices

Negotiated cattle sales only account for 12% of all trade in 2025.
Fed-cattle marketing also relies heavily on arrangements; thin cash means a small nudge can move the base.
Packers collude to control prices through different regions at different times.

Count 2 — Farmers and ranchers aren’t paid fairly

Packer fabrication is the chokepoint; if they control bids, the farm share should be squeezed.
Beef packers get rich, while farmers and ranchers struggle.

Count 3 — Packers control consumer beef prices

Because formula sales dominate, packers can push through higher wholesale prices that retailers must accept, ultimately raising the shelf price.

Media’s ask: Find that packers control cattle bids, short the farm gate and dictate consumer prices.

The Packers’ Case (Plaintiff)

Count 1 — Cash is thin, but it’s not collusive; formulas still point to cash

Bid dispersion shows time of major spikes during shock periods. We don’t see continue periods of near zero bid dispersion by region.

(The Big Bad Packer)

Cash cattle sales are at 12.1%, but that is up 202.4% from 2014.

(The Big Bad Packer)

What is the right amount of negotiated trade? 20%, 30%, 50%?

Count 2 — The beef dollar split doesn’t show packer capture

(The Big Bad Packer)

Retailer dollar increased from $1.24 (2000) to $3.70 (2025), an increase of 198%.
Farm dollar increased from $1.49 (2000) to $4.90 (2025), an increase of 229%.
Packer dollar increased from $0.33 (2000) to $0.44 (2025), an increase of only 34%.
Despite the rhetoric, the packer share of total beef dollars has decreased from 10.9% (2000) to 4.9% (2025).

Count 3 — Packers control wholesale prices

(The Big Bad Packer)

Negotiated sales have decreased in recent years, but are still above the 20% mark.
Internal goals for retail, foodservice, and distributors incentivize buyers to buy as close to the USDA negotiated price as possible. Formula sales are a result of such incentives.

Cross-Examination

For the Media

Identify multi-month stretches in Exhibit A where dispersion is near zero through stress periods.
Reconcile a “packer squeeze” with packer at 4.9% and farm at 54.2% of the beef dollar in 2025 (Exhibit C).
Explain how packers “dictate” prices when Exhibit D states formulas typically reference a robust negotiated market.

Jury Instructions (Deciding tests from the exhibits)

Dispersion: Exhibit A must show persistent compression to prove control.
Beef dollar: Exhibit C must show a large, rising packer share to prove capture.
Pricing mechanism: Exhibit D must show formulas detached from negotiated to prove unilateral control.
Spot trend: Exhibit B shows whether negotiated liquidity is eroding or improving.

Verdict (Reasoned)

Bid behavior: Variable and shock-responsive with reversion (Exhibit A).
Economics: Packer value is small and falling in share; farm value is largest and rising (Exhibit C).
Mechanics: Formulas reference negotiated; negotiated participation in fed cattle is up since 2015 (Exhibit B).

Finding: The claims that packers control cattle bids, short producers and set consumer beef prices are not proven on the economic record.

— Hyrum Egbert authors the biweekly “ The Big Bad Beef Packer ” newsletter, which takes a look at packinghouse truths, trends and tough questions.

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You Be The Judge: The Big Bad Beef Packers Are On Trial

Cattle on Feed Report Indicates Liquidation Continues

Tue, 25 Nov 2025 19:50:07 GMT

USDA caught up on cattle on feed (COF) data following the shutdown when it released the COF report on Friday, Nov. 21.

“Amid the drumbeat of bad news in the cattle market over the last month, including on-again, off-again tariffs, jawboning for lower beef prices and Tyson’s announcement it will close its beef packing plant in Lexington, Neb., in January, USDA released a cattle on feed report,” says David Anderson, Texas A&M Extension economist in a recent Southern Ag Today e-newsletter .

Anderson summarizes the report did not contain many surprises. Placements and marketings were down 10% and 8%, compared to October 2024. The combination left the number of cattle on feed down 1.6% compared to Nov. 1.

(USDA-NASS Livestock Marketing Information Center)

“The most interesting, and important, number in the report was the number of heifers on feed,” he says.

Heifers on feed is normally reported in the October report, but that was delayed due to the shutdown. There were 4.355 million heifers on feed on Oct. 1. That was 245,000 fewer than Oct. 1, 2024, and the fewest heifers on feed for an October since 2018.

(USDA-NASS Livestock Marketing Information Center)

“It also represented the fifth consecutive quarter of year-over-year declines in the number of heifers on feed,” Anderson summarizes. “That would seem to be positive news if looking for evidence of herd expansion.”

Josh Maples, University of Mississippi associate professor of agricultural economics, agrees with Anderson regarding the most interesting number in the report was the percentage of heifers on feed and although numbers are down there is more to the story.

Maples wrote in a recent Cattle Market Notes Weekly e-newsletter : “Much of this decline is likely driven by the lack of spayed heifer imports from Mexico. There were 381,283 spayed heifers imported during the first nine months of 2024 compared to only 79,507 this year. Overall, the heifer on feed numbers do not yet reflect strong signs of much heifer retention in the U.S.”

Don Close, Terrain senior animal protein analyst, discussed the COF report with Chip Flory during “AgriTalk” on Monday .

Close says: “Heifers as a percent on feed at 38.1% essentially is unchanged from July. It’s down a percent and a half from a year ago.

“The bottom line is we are still at levels that clearly shows we were in a liquidation phase. The neutral zone is 36% to 37% of heifers on feed, and we’re at 38%,” he says. “We’re still going to see a huge drop in heifers on feed when we finally get to expansion in earnest, so we’re kicking the can down the road.”

Texas Slips to No. 2

The report included a rare event with Texas slipping to No. 2, reporting 10,000 fewer cattle on feed than Nebraska, 2.63 million head versus 2.64 million head. The last time Nebraska had more cattle in feedyards than Texas was May 2018. The lack of Mexican feeder cattle imports is the most important factor in this ranking reversal.

Maples adds this is only the 10^th month in at least the past 33 years Texas hasn’t topped the list.

“There were a couple of other interesting numbers to think about,” Anderson says. “More steers were reported on feed than a year ago. At first glance, we might think that seems surprising given the decline in cow numbers, but days on feed is boosting total cattle on feed inventories, given overall declines in cattle numbers.”

(USDA-NASS Livestock Marketing Information Center)

Your Next Read: What Does Tyson’s Announcement Mean to Beef Producers?

What Does Tyson's Announcement Mean to Beef Producers?

Mon, 24 Nov 2025 23:10:51 GMT

Chaos in the cattle market continues as Tyson Foods announced on Friday its plan to end operations at its Lexington, Neb., beef facility and convert its Amarillo, Texas, beef facility to a single, full-capacity shift. The cattle complex was limit down Monday reacting to the announcement.

The Lexington plant employs nearly 3,200 people and can harvest 4,500 cattle a day, but has been running 3,600 to 3,700 according to John Nalivka of Sterling Marketing. It is one of 11 beef facilities in the company and one of the largest. The transition in Amarillo is expected to reduce daily harvest numbers from 5,500 to 2,700 to 2,800 and impact 1,700 workers. Tyson says the changes will go into effect on Jan. 20, 2026.

Jeff Stolle, Nebraska Cattlemen’s Association director of marketing, predicts the Lexington plant closure will reduce Nebraska cattle harvest capacity by 15%.

“The Tyson plant in Lexington has been a very valuable and consistent piece of our packer processor infrastructure in the state for up against 35 years now, and to lose this amount of harvest capacity on a daily basis is definitely going to be a challenge,” Stolle says.

The announcement is a shock as Stolle says there are significant feedyard expansion projects in the works, and he hopes there’s a future opportunity to bring the Lexington facility online with different ownership.

“Given the feeding infrastructure that is located near the Lexington plant, and the availability of high-quality feeder cattle and feedstuffs, we obviously hope there is some sort of path toward the plant continuing to operate as a harvest facility,” Stolle summarizes.

Don Close, Terrain senior animal protein analyst, explains the announcement comes following a rough year for the meatpacking industry and admits a plant closing has been a possibility for the last 18 months.

“Fed beef packers have been losing an average of $200 per head,” he says. “Those margins have certainly improved over the last two or three weeks, but it has been a tough year, and I don’t know that we’re near the end of this yet.”

Tyson’s announcement says it is shifting production to other plants to increase efficiency. But why close Lexington?

Elliott Dennis, University of Nebraska-Lincoln livestock and meat economist, predicts Tyson targeted its least efficient plant for closure to maximize profitability across its operations, highlighting the importance of operational efficiency in the beef industry.

Other analysts speculate competition from the new Sustainable Beef Plant in North Platte might have played a role.

According to Trey Wasserburger, Sustainable Beef is currently harvesting 1,100 head per day but plans to ramp up to 1,500 by Jan. 1.

Overcapacity Issue

Derrell Peel, Extension livestock marketing specialist from Oklahoma State University, says the Tyson announcement reduces capacity in the industry but does not solve the problem of overcapacity.

“This will reduce industry slaughter capacity by roughly 7,000 to 8,000 head per day,” he explains. “The exact impact will depend on forthcoming details, especially how Tyson will manage a one-shift plant. Depending on the details, the reduction represents roughly 7.5 to 9% of total industry slaughter capacity.”

Peel says Monday to Friday daily fed slaughter thus far in 2025 has averaged 90,529 head per day, down 3.6% from the recent peak (93,931 head per day) in 2022. However, Saturday slaughter has averaged 4,878 head this year, just 13.1% of the 37,137 head per day average in 2022.

For the first 45 weeks of the year, total weekly fed slaughter has averaged 457,524 head compared to 506,793 head per week in 2022, a decrease of 9.7%. The Tyson planned reduction in packing capacity might be nearly (but not quite) enough to balance the decrease in cattle slaughter since the peak in 2022. However, fed slaughter is expected to continue decreasing in 2026 and 2027.

“Excess packing capacity will continue to be an issue for beef packers for the foreseeable future,” Peel summarizes.

Short- and Long-Term Impacts of Lexington Plant Closure

Dennis says the Lexington plant closure will have immediate short-term effects on cattle prices. Drawing parallels to the 2019 Holcomb, Kan., plant fire, he predicts prices potentially falling and taking months to recover.

“Back in 2019, it took us about five to six weeks to find a bottom on the live cattle market,” Dennis says. “From the time we had that announcement of the fire, we ended up going about 12% down from where we were at pre-fire, and it took us almost three, three and a half months to get back to pre-fire prices.”

Dennis says the finished cattle will redistribute to other regional plants and the impact will be more about change in value proposition and logistics for producers than the ability to find a buyer.

Hyrum Egbert, meatpacking industry analyst, explains, “Tyson just changed the math on U.S. beef.”

He predicts the short-term impact will be:

Live cattle and feeders. Nearby futures and regional cash should soften, especially around Lexington/Amarillo as cattle lose a local bidder and get pushed farther to other plants. Expect weaker basis in those draw areas.
Beef cutout/wholesale. He says this is a rationing signal to beef buyers. Even if some volume is picked up elsewhere, the headline is tighter kill space which will lead to bullish cutout as buyers front-load coverage.
Packer margins. Less capacity chasing the same tight cattle supply will equate to better gross margins for packers.
Logistics and spreads Longer hauls for cattle will lead to higher freight, wider regional price dispersion and more noise in cash versus formula debates.

Long-term Egbert summarizes: “This isn’t a Saturday kill adjustment; it’s a permanent trim in hooks. Capacity is being pulled closer to the ‘new normal’ cattle supply, which reduces the odds of prolonged negative packer margins in the next phase of the cycle.”

Likewise, Dennis predicts long-term the closure will reduce cattle prices due to lower processing capacity and less competition. Yet despite disruptions, he says the fundamental demand for beef is historically high, driven by consumer preference and quality improvements, which should help support cattle prices in the long run.

“With tighter U.S. kill space on top of a small herd, imports — especially lean for grind — matter even more,” Egbert adds. “Tariffs, quotas and border policy will have an even stronger influence on spreads and retail prices. This is not likely going to be the last of plant closures. Regional plants are still extremely vulnerable and susceptible to closure.”

What’s Next for Producers and Packers

“I don’t think producers necessarily need to do anything different,” Peel says. “I still think there’s excess capacity in the industry, even with this downsizing, so there will be plenty of demand. I don’t think it changes anything. It doesn’t change the supply fundamentals at all.”

Close agrees with Egberts prediction that this might not be the last plant closure. He says Tyson’s announcement clears the path for other packers to follow suit.

“It’s not out of the realm of possibilities that we see another large plant or some of the smaller regional plants closed before we reach bottom in this cattle supply,” Close says.

Peel says with Tyson’s decision to reduce a shift and not close Amarillo is a positive.

“By only making a one shift adjustment in Amarillo, that tells me that decision was very much just directly a function of availability of cattle, but it also means they have the ability to go right back up to two shifts when the time gets right, as far as cattle availability,” Peel explains. “They just spent a lot of money in Amarillo remodeling and refurbishing that plant, so I don’t think they’re going to walk away from it completely, unless things continue to deteriorate for them in terms of their beef business.”

Dennis reminds producers the importance of managing price risk using available tools (like futures and options) because market volatility is unpredictable. He stresses risk management should be proactive, not reactive.

Close was a guest on AgriTalk Monday discussing the impact of the Tyson announcement as well as other beef industry economic factors today.

Your Next Read: CattleFax Predicts Profitability Despite Increased Uncertainty

CAB Insider: Market Update Nov. 19

Thu, 20 Nov 2025 13:32:43 GMT

The fed cattle market continued the downtrend last week as pressure from Live Cattle futures and lower boxed beef values weighed on the total beef complex. The larger volume of cash cattle traded in the north with Nebraska and Iowa prices averaging $224/cwt. for the week. Much smaller negotiated head counts in the south were led by Kansas feedyards receiving an average of $230/cwt. with Texas right behind at $228/cwt.

Total harvest volume increased on the week by 16,000 head to reach 576,000 head total. Just 10,000 head of the increase came from fed steers and heifers, putting that weekly total at 459,000 head.

(CAB)

Carcass weight data remains unavailable despite the government reopening but estimates are that average steer/heifer weights should now be near or above 950 lb. Excellent feedlot pen conditions and moderate October-November temperatures have likely added to the year-over-year weight increases which have averaged +24 pounds over last year.

Carcass cutout values have been weaker in November, a pattern which is not atypical for the month. The comprehensive cutout has averaged a 3% decline from the beginning to the end of November in the past three years. With the Thanksgiving holiday coming up next week it’s unlikely that spot market beef business will be sharp enough to support upward wholesale beef prices this week or next.

Tracking Premiums to the Source

Merchandising carcasses is not an easy task. If you ask any ranch-to-table producer what their largest pain points are, you are likely to hear that finding a customer for all of the end meats can be a challenge. That producer likely has excess ground beef supplies just waiting for a customer with a similarly large need. The middle meats are typically easier to move and undersupplied in comparison.

This issue has plagued startup branded beef programs for a few decades. A solid cattle supply plan coupled with a promising marketing niche has been undercut time and time again by the inability to sell the end meats at the necessary premium to make the business model profitable.

Certified Angus Beef faced the same challenges in the formative years, as the first branded beef label set out to garner specification-based premiums in a market where none existed. Now in its 47th year, the brand has successfully carved out premiums over commodity USDA Choice from end to end of the carcass.

(CAB)

On a dollars per primal basis, the loin is untouchable when it comes to the CAB markup with a heavy-hitting combination. Constituting 21.3% of total carcass weight, the loin’s key premium-grabbing cuts, such as the tenderloin, strip loin and top butt, push the loin primal to the top of the carcass without fail. In the brand’s 2025 fiscal year, the loin premium added $51.06 per head to CAB carcasses over Choice.

Many are surprised to learn that the chuck primal is the second largest premium contributor to the CAB carcass, calculating a $38.84 per head premium. The chuck edges out the rib’s total return simply because of its distinct weight advantage at 2.6 times that of the rib. Interestingly, the chuck’s average CAB premium per pound over Choice has advanced such that the chuck moved up to second in the premium hierarchy as recently as 2023. The CAB rib, unsurprisingly, captures just over double the premium per pound when compared to the chuck. The rib added $30.39 per head over Choice in the fiscal 2025 data, contributing just 11.4% of total carcass weight but 18% of the total premium contribution to the carcass.

The round is the last of the four major carcass primals when it comes to the brand’s premium contribution. At 22.3% of carcass weight, the round has traditionally offered less premium opportunity, as these cuts are often less tender than others, often utilized for roasts and ground beef. These factors tend to limit the CAB round premium, landing at $17.68 per head value-add for the year.

Total CAB premiums per head quickly diminish as weight rapidly declines across the brisket, plate and flank. Premiums per pound are quite attractive for briskets and plates, nearing $0.13/lb. for the year. Yet those two combined are just 12% of total carcass weight, limiting their impact as compared to the much heavier primals that carry even larger premiums per pound.

What Does Talk of $10 Ground Beef Mean to Producers?

Wed, 19 Nov 2025 20:00:35 GMT

While the core fundamentals of the beef industry remain unchanged, the overall environment has become much more volatile and uncertain in recent weeks.

Omaha Steaks CEO Nate Rempe, in a recent interview on Fox Business’ Mornings with Maria , predicts ground beef prices will reach $10 per pound by the third quarter of 2026.

In response to that prediction, ag economist Glynn Tonsor from Kansas State University reports, according to September Bureau of Labor Statistics (BLS), the national average price for ground beef was $6.32 per pound. He explains while niche markets such as Omaha Steaks could see some products priced at $10, the national average is unlikely to reach that level within the next three years.

Tonsor emphasizes Omaha Steaks serves a distinct customer base, and their prices should not be generalized to represent all U.S. ground beef prices.

Lance Zimmerman, senior animal protein analyst with Rabo AgriFinance, adds: “It’s possible, but that’d be pretty wild. Is it probable? I would say no, based on history.”

He explains his stance also referring to the BLS historic data, although prices spiked radically during the pandemic posting the highest year-over-year increases on record, that event only resulted in a 34% jump, far short of the 54% increase needed to see $10 ground beef by the third quarter of 2026.

What Does All This Beef Chatter Cause?

The beef industry has found itself in national headlines since Sept. 15. The industry has been experiencing chaos in the markets since President Donald Trump made statements regarding the need to lower beef prices as well as his request for the Department of Justice to investigate meatpackers for driving up the price of beef.

“The base fundamentals of the industry have not changed in the last four weeks,” Tonsor says. “The volatility, the noise in the business environment, has definitely elevated.”

Read more about the industry chaos today:
Beef Industry Chaos: Tight Supplies, Strong Consumer Demand and Political Interference

Zimmerman explains while political sound bites and promises to lower food prices draw media attention, they do not directly affect the day-to-day decisions by producers who remain focused on long-term business fundamentals.

“At the end of the day, the average cow-calf producer, stocker operator and feedlot operator, have a business to run, and all of this noise doesn’t change much surrounding their day-to-day business,” Zimmerman summarizes. “The challenge is the president is making this a very regular soundbite, as is the rest of his administration. And, cyclically, there is no quick fix.”

Zimmerman shares his frustration regarding the broader impact of political statements, especially presidential promises to bring down food prices. He explains that, historically, the only way to significantly reduce food costs is to enter a recession. The catch, he argues, is that neither administration nor producers desire such an outcome. This underscores the conflict between policy rhetoric and on-the-ground market drivers.

Tonsor adds media attention and dramatic statements, such as $10 ground beef, often do not accurately represent broad market reality.

“I’m trying to use this as an excuse to educate on why prices are higher; [it’s] not just because cow numbers are down,” Tonsor explains. “When we just jump to the number of cows, we don’t give credit to the demand story that the public wants beef.”

Read more about beef demand:
Consumers Confirm Protein is In: Meat Continues to Have Its Moment on the Plate
How Many Minutes Does a Consumer Have to Work to Buy A Pound of Ground Beef?

One question on the mind of producers and industry stakeholders is if the political and media attention will heighten consumer awareness to beef prices and cause a change in buying behavior.

Tonsor says, so far, there is little impact from these headlines on consumer demand.

“It’s too early to tell if there’s been a consumer demand impact from all the chatter,” he says. “My best guess is little-to-no direct impact.”

Both analysts agree beef prices are fueled by demand. Tonsor notes consumers are willing to pay the retail price of beef today because of their continued demand for taste and protein. He points out if public demand for beef stays strong, prices will remain robust.

“The public still thinks taste is the most important thing when they make a decision,” he summarizes.

Slowing Down Rebuilding

“This uncertainty has wrecked the market potential in Chicago in the short run,” Zimmerman explains. “But the timing of it also couldn’t be worse for the cow-calf producer who’s making those fall retention decisions right now.”

Both analysts agree the heightened uncertainty is making producers more hesitant to invest or expand their herds, which will lead to slower industry investment and herd growth.

Read more about herd rebuilding:
Rebuilding the U.S. Cow Herd: A Calculated Climb

“I think we’re going to slow investment compared to even a month ago, just because those that are anxious or don’t like uncertainty are a little more cautious today than they were a month ago,” Tonsor explains. “Those that are extra uncomfortable with elevated uncertainty, like not knowing what the trade environment might be, it’s going to give them pause. So, they will be less likely to hold back a heifer and expand. They’ll be less likely to modernize the feedyard. They’ll be less likely to do whatever that capital investment was.”

Will Tarriff Reduction Impact Prices?

Late last week, Trump signed an executive order that modifies the scope of the reciprocal tariffs he first announced on April 2. The executive order now exempts several agricultural products from tariffs, including beef.

Zimmerman explains Brazil’s beef processors and beef exporters would have gained the most if the country’s additional tariffs were removed by the U.S. The previous rate was an additional 50% tariff on top of the 26.4% tariff that exists on all imports from countries without a free-trade agreement on beef after the first 65,005 MT each calendar year. However, the Brazil tariffs are structured under two separate practices. Ten percent are reciprocal tariffs, and the additional 40% that came in August are through another process.

“The latest removal of reciprocal tariffs on beef effectively changes Brazil’s country-specific import tax from 50% to 40%,” he explains. “This is not going to significantly change the competitive landscape for global exporters shipping into the U.S. market. It is still incredibly tough for Brazil to compete with Australia, New Zealand and other major lean beef importers in the U.S. market.”

Tonsor adds reducing tariffs could marginally lower beef prices for consumers, but the effect would not be dramatic. He points out the U.S. produces the majority of its own beef (more than 80%), so changes in import tariffs have a limited impact on domestic prices.

He says recent record import months only moved the import share from around 15% to slightly more than 20%. Tonsor expects the net effect of the tariff reduction on beef prices to be fairly small, potentially less than a 5%-to-10% change, and that overall, strong domestic demand will continue to be the main driver of prices.

Challenge to Producers

Tonsor says his advice to producers is to steady the ship.

He encourages a steady approach, suggesting those comfortable with uncertainty should move forward as planned, while others might pause on major decisions. Ultimately, he expects less herd expansion and more caution among producers, even as demand fundamentals continue to provide underlying strength for the industry.

Tonsor says while general industry investment and expansion might slow, producers who move forward despite the uncertainty could be rewarded, especially if fewer others do the same. His overall message is for producers to carefully weigh their risk tolerance and business needs before making significant changes and not to let the current noise distract from their long-term goals.

Despite recent market corrections, Zimmerman says strong demand and cyclical tightness mean profitability remains high for most producers. He shares these six strategies for producers to consider looking forward:

Consider Strategic Heifer Retention. He advises producers to begin or continue retaining heifers, even if only enough to replace natural attrition in the cow herd, as a step toward gradual herd rebuilding in tight supply conditions.
Use Price Protection Tools. He emphasizes the importance of locking in profit floors using risk management tools such as Livestock Risk Protection (LRP) insurance , futures or options contracts, encouraging producers not to wait for the highest prices but to protect profitability when opportunities arise.
Maintain Long-Term Perspective. Despite recent market corrections, he urges producers to keep a long-term view; demand is strong, and rebuilding will be slow, so planning for sustained higher prices is key.
Stay Vigilant and Informed. He recommends producers remain watchful for profit opportunities in the market, be proactive in their strategic decisions and stay informed about both market trends and policy changes.
Be Cautious, Not Reactionary. He suggests not overreacting to political headlines or media narratives, emphasizing that day-to-day operational fundamentals should guide decisions rather than short-term noise.
Prepare for Continued Volatility. He encourages resilience and adaptation strategies as the industry faces persistent uncertainty from trade policy and disease threats such as New World screwworm .

Your Next Read: Did the Administration’s Plan to Lower Beef Prices Wreck the Bull Run in the Cattle Market?

Beef Industry Chaos: Tight Supplies, Strong Consumer Demand and Political Interference

Wed, 12 Nov 2025 20:04:16 GMT

The current state of the cattle market and beef industry has been described as chaotic. “There’s chaos in cattle,” as Chip Flory, AgriTalk host, put it.

The industry turmoil follows recent statements made by President Donald Trump regarding the need to lower beef prices as well as his request for the Department of Justice to immediately begin an investigation into meatpackers for driving up the price of beef.

Derrell Peel, Extension livestock marketing specialist from Oklahoma State University, affirms these are unique times, emphasizing while political factors have always indirectly influenced agriculture, it’s unprecedented for the cattle and beef markets to be at the center of direct political debate.

On a recent AgriTalk segment, Peel points out the inherent biological and production constraints of the cattle industry — particularly the fixed timeline to raise cattle — make quick fixes impossible. Both Flory and Peel stress that no political policy can shorten the cattle production process; any effective supply response requires patience and long-term adjustment.

Packers Under Fire

The concept of industry consolidation and foreign packer ownership has long drawn scrutiny with frequent government investigations. Peel says highly concentrated industries such as beef packing have been targets for skepticism and regulatory attention for over a century, to the point suspicion of packers is almost “a cultural thing” within segments of the industry.

He characterizes the latest call as another attempt to target convenient scapegoats rather than addressing deeper systemic realities of supply and demand.

“The reason we have the industry structure we do is because the economies of size and cost efficiencies are such a powerful economic force,” Peels explains.

He confirms researchers have long studied market power, and while concentration does have a small negative price impact for producers, the efficiency and cost-savings from large-scale firms more than compensate. These benefits, he says, keep cattle prices higher for producers and beef prices lower for consumers than they would be with a less efficient structure.

Dissecting the economics of margin markets Peels explains why price changes in different parts of the beef supply chain — cow-calf, feeders, packers and retailers — don’t move in lockstep. He uses a “bungee cord” analogy to illustrate the complex, dynamic and time-lagged interactions linking cattle prices at the farm with retail beef prices.

“All cattle prices and beef prices are ultimately connected, but they’re not connected with a stick or a chain,” Peel summarizes.” They’re connected with a bungee cord. There’s just an enormous amount of dynamics in this thing.”

Regarding the foreign ownership debate, Peel says there is no evidence foreign ownership alters packer behavior within the U.S. marketplace. He emphasizes foreign firms have made large investments in U.S. facilities and continue to operate them by the same market logic that would govern domestic ownership.

He also points out it is unclear who else would be in a position to make such significant investments if these foreign companies were not involved. This pragmatic view suggests the ownership issue might be less important than is commonly believed, at least concerning everyday operations and market outcomes.

A Lot Hinges on Rebuilding the Cow Herd

In his latest article, “ All Bets are Off ,” Peel says: “The latest edition in the torrent of recent political attentions directed at the cattle and beef industry includes allegations of market manipulation against the beef packing industry. Beef packers are the one segment that has been most negatively impacted in the current market, incurring huge losses due to poor margins and limited cattle supplies.”

(Meat Institute)

Peel reports packers have been losing enormous amounts of money for about the past 18 to 24 months. According to the Meat Institute, packer margins slipped into the red in September 2024. Through the week ending Oct. 4, 2025, packer margins were a negative $126.50 per head, up slightly from a year earlier at a negative $125.65 per head, according to Sterling Profit Tracker. The outlook for the year is a negative $165.96 per head packer margin.

“There’s just simply not enough cattle for them to operate at cost efficient capacities,” Peel explains.

This negative trend was anticipated — the reduced supply of cattle has made it difficult for packing plants to function at cost-efficient capacities, leading to the accumulation of operating losses. Peel points out the combination of low unit margins and insufficient cattle supplies challenges the economic viability of packers, further illustrating the complexity of the current environment.

This decline in inventory is not the result of a single factor but is driven by several years of drought and other market pressures. It is clear high beef and cattle prices are a result of these tight supplies and, according to Peel, these high prices are likely to persist for several years. The industry simply cannot turn around production levels quickly, and it will take time — a matter of years, not months — for conditions to normalize.

“Using logic that only works in the office of a politician, packers are supposedly wielding unacceptable market power while paying record high cattle prices and artificially raising beef prices … but not enough to avoid losing a couple hundred dollars on every animal they process — certainly many millions of dollars,” Peel says. “If beef packers had any significant ability to exercise market power, I am certain that we would not have record high cattle prices and packers would not be losing money.”

Peel suggests the federal government attacks on beef packers are aided and supported by a vocal minority of the cattle industry and a few sympathetic politicians who view packers as a perennial villain and always worthy of attack anytime the opportunity is presented.

“The timing of such attacks this time is particularly puzzling as dismantling the packing industry would certainly jeopardize current record high cattle prices and the best economic returns most producers have ever enjoyed,” Peels says. “I guess some cowboys just can’t stand prosperity.”

R-CALF CEO Bill Bullard says the cattle market is fundamentally broken citing years of an inverse relationship between falling cattle prices and increasing retail beef prices when the only ingredient in beef is cattle. Read more about his perspective.

Patience not Politics

Beef and cattle prices, Peel notes, are historically high, a result of industry-wide low cattle inventory. Rebuilding the nation’s cow herd will be a long, slow process, keeping prices elevated for an extended period. And Peel says there is no definitive evidence producers are saving heifers to start the rebuilding process.

“2025 may prove to be technically the cyclical low, but 2026 is going to be barely bigger, if it is, and no growth in 2026 and probably none in 2027 ... it’s 2028 into 2029 before that turns into increased beef production,” Peel predicts.

He summarizes neither regulatory nor political action will can speed up the rebuilding process. It will take years of concerted effort, market healing and stability before the industry can expect a meaningful rebound in herd numbers and production — a reality that requires patience across the industry.

“There is absolutely nothing anybody can do to make beef prices go down, or cattle prices, other than maybe tear up the industry completely,” Peels says. “And if we tear up the industry, it’ll make cattle prices go down, but it won’t make beef prices go down. It’ll make beef prices go even higher for consumers and the only way to fix this is to give the industry time to rebuild, and that’s going to take two to four years if we ever get started.”

He says a majority of cattle producers understand the beef industry is extremely complex and all segments are critical and essential.

“Though the outcome of current political actions is uncertain, the potential for long-term harm to the industry is substantial,” Peel says. “Anytime politics trumps economics, the strong supply and demand fundamentals that have determined the outlook for the industry to this point become irrelevant. Expectations for prices and production going forward are now completely clouded…therefore… all bets are off.”

Your Next Read: You Be The Judge: The Big Bad Beef Packers Are On Trial

You Be The Judge: The Big Bad Beef Packers Are On Trial

Mon, 10 Nov 2025 17:09:45 GMT

Beef prices rise and fall for the same unglamorous reasons they always have: supply cycles, plant utilization and downstream demand. That story doesn’t fit in a headline, so the search for villains keeps returning — secret control, foreign dominance and collusion.

This article addresses three claims head-on:

Packers colluded to raise prices
The BIG 4 and foreign-owned firms control U.S. beef
Packers set cattle and retail prices at will.

The truth is less thrilling than a press conference or soundbite, but it is, well... the truth!

Debunk No. 1: Packers colluded to raise prices

Many have said the BIG 4’s decisions to settle price fixing claims out of court is an admission of guilt. However, through many industry contacts, the true nature of the price fixing settlements came from each firm deciding it was far cheaper to settle than to continue paying legal fees. While this was understandably logical, it created more scrutiny as it made the packers look guilty — even if they were innocent.

If collusion were the driver, you wouldn’t see a continued increase in the spread between wholesale and retail prices, nor would you see packer spreads expand and contract with plant utilization bottlenecks.

Herd cycles drive the baseline. When the national herd tightens, prices lift. When the herd rebuilds, they ease.
Margins behave within supply constraints, operational efficiencies and consumer preferences — not conspiracies. Spreads widen when plants can’t run (labor, downtime, COVID, etc.), and compress when chain speeds normalize.
The “spike” periods line up with observable shocks, not back-room meetings.

Exhibit A - Ground Beef - Who Should the Consumer Blame for Higher Prices?

(The Big Bad Beef Packer, Hyrum Egbert)

2011 to 2013: Ground beef spread between retail and wholesale = $1.64/lb.
2023 to 2025: Ground beef spread between retail and wholesale = $3.22/lb.
Spikes in wholesale price, away from the dressed cattle price, are reflective of COVID and the lingering effects of the glut of cattle in 2021 and 2022.
The price reflected in retail does not translate to the packer.

So what? Collusion isn’t required to explain any of the big moves. The cattle cycle and plant utilization do the heavy lifting.

Debunk No. 2: The BIG 4 and foreign-owned packers control U.S. beef

This talking point usually leans on fed-cattle concentration and then generalizes to the entire beef market. That’s a category error. While the BIG 4 have between 80% to 85% of the fed production capacity, they only have about 50% of the non-fed beef production.

Counting all federally inspected beef (fed and non-fed) changes the picture. Non-fed volume (cows/bulls) is material and not monopolized by any single group.
Concentration is variable — not a one-way march. The BIG 4 share has moved with investment cycles, openings/closures and permitting/labor constraints.
Profit data doesn’t match the control story: persistent, outsize returns would be the tell. Outside of shock windows, long-run segment margins in public filings sit in the low single digits (see the Tyson graph below).

What portion is foreign-owned? Using total FI production (fed + non-fed) rather than fed-only stats, the combined share held by foreign-owned firms JBS and National Beef is meaningfully lower than headlines.

A reasonable, plant-by-plant roll-up over the last decade typically places their combined share in the low–to–mid 30% range of total FI beef, varying by year as capacity and throughput shift. The exact value depends on which year you pick and whether you measure capacity or actual production. But in either case, it is well below “control of the whole industry.”

While it is important for the country to keep tabs on foreign-owned interests, especially in our food supply chain, we should be careful about miss-characterizing their actual influence on the market.

So what? Ownership headlines make noise; capacity and throughput make prices. The practical chokepoint for ranchers, feeders, and consumers is capacity resilience; labor, downtime, logistics, permitting, not the nationality of owners.

Debunk No. 3: Packers control cattle and retail prices

Prices move because the chain is… a chain. Live cattle trade into the wholesale cutout, and wholesale gets translated into retail categories with delays, packaging, labor and merchandising layered on top.

Key points:

Live ↔ wholesale co-movement is structural. Cattle supply and plant speed determine how quickly shocks pass through and how wide spreads get.
Retail is sticky by design. Grocers price to categories and promotions — not to a daily cattle quote. That’s why your ground beef figure shows wholesale and cattle tracking while retail moves on a different cadence.
And if packers truly “set” prices, they wouldn’t periodically lose money for more than year at a time. Yet, they do.

Exhibit B - Profit Margin by Segment

(The Big Bad Beef Packer, Hyrum Egbert)

Sterling publishes a Beef Profit Tracker that outlines expected returns by segment in the industry.
Adapting this information and overlaying Dressed Cattle Price and the Choice Cutout, it becomes clear that market control is clearly not in the hands of the packer (or anyone).
The accelerated rise in cattle prices, due to supply, has outpaced the cutout and led to major packer losses.

Exhibit C - Tyson vs S&P

(The Big Bad Beef Packer, Hyrum Egbert)

Tyson Beef versus S&P: ~4% average segment operating margin across 17 years. Only the COVID dislocation produced standout highs. That’s not a price-setting juggernaut. That’s a cyclical, asset-intensive business struggling to survive.

So what? Why would the beef packers, with all the alleged control over prices and markets, lose money some years, and underperform equity markets by more than 50%?

Notes for policy staffers (pragmatic, data-first)

Country-of-Origin Labeling (beef): Don’t sell mandatory labels as a price-lowering tool. Past scanner data didn’t produce a durable retail demand lift. Keep origin claims voluntary and program-based for customers who will pay.
Imports: Incremental flows are predominantly lean trim, offsetting non-fed shortages and keeping grinds available. Blunt Section 232 quotas/tariffs raise consumer prices without fixing structural supply.
Grazing/public lands: Additional acreage helps over time, but herd rebuilds are multi-year and capital-intensive. Anchor expectations in timelines, not headlines.
Transparency: Back consistent monthly reporting on capacity utilization and live↔cutout spreads, plus better outage reporting. Reducing rumor gaps lowers volatility without picking winners.

Brief Rebuttal FAQ

“If there’s no control, why did packer margins spike in 2020?”
Because capacity collapsed. When dozens of shifts vanish, wholesale outruns live supply. Spreads narrowed as chain speeds recovered.

“Don’t foreign owners dominate U.S. beef?”
Not really. On total FI beef, JBS + National Beef generally sit in the low–to–mid 30% combined share, moving with capacity and production each year; not domination.

“Would mandatory origin labels fix retail prices?”
No. They add cost and didn’t produce a durable demand bump last time. Voluntary, auditable programs capture premiums without taxing everyone.

“Retail doesn’t track cattle, doesn’t that prove manipulation?”
Retail is category-managed and sticky. Labor, packaging and promotions add inertia. That’s why wholesale/cattle co-move while retail moves on a different cadence.

Conclusion

The U.S. beef complex doesn’t need a boogeyman to explain price behavior. It needs sober arithmetic and better throughput. When you measure the right things — herd size, utilization, spreads and the composition of imports — 25 years of history line up. The truth may be boring. It’s also what helps ranchers, feeders, packers, retailers and consumers make better decisions.

Your Next Read: Trump Asks DOJ to Investigate Meatpackers over Beef Prices

— Hyrum Egbert authors the biweekly “ The Big Bad Beef Packer ” newsletter, which takes a look at packinghouse truths, trends and tough questions.

DIRECT Act: Bill Proposes To Widen Market for State-Inspected Meat Processors

Fri, 07 Nov 2025 16:19:44 GMT

The Direct Interstate Retail Exemption for Certain Transactions (DIRECT) Act — which would give livestock and poultry producers greater access to consumers nationwide — was reintroduced Thursday. It would create a narrow exemption to allow small producers and butchers greater flexibility for interstate sales without compromising food safety or jeopardizing market access in international trade.

This legislation introduced by Sens. Roger Marshall (R-Kan.), Tommy Tuberville (R-Ala.), and Cindy Hyde-Smith (R-Miss.) would increase marketing opportunities for smaller meat processors and give consumers more options to buy local beef.

“The last thing our livestock producers need is more red tape,” Marshall says. “Like many states, Kansas has strong meat inspection standards that already meet federal requirements. By creating a simple exemption, the DIRECT Act uplifts our ranchers by empowering them to sell their high-quality beef in innovative ways and across state lines.”

National Cattlemen’s Beef Association (NCBA) has announced its continued support for the DIRECT Act.

“The cattle business benefits greatly from expanding marketing opportunities, and the DIRECT Act opens the door to the growing number of cattle producers who seek to grow their market across state lines,” says NCBA President and Nebraska cattleman Buck Wehrbein. “The increased market exposure for those cattlemen and women who are selling beef direct to consumers adds value and provides tremendous benefit for our farmers and ranchers.”

The DIRECT Act would allow state-inspected meat processors to sell beef across state lines, in limited quantities and through e-commerce, direct to consumers. The bill also protects food safety by ensuring a paper trail exists for tracing and containing potential food safety issues. Many of these direct-to-consumer marketing methods have rapidly increased in popularity during the last several years and consumers have recognized the convenience of buying local beef online.

“Ever since the Biden administration, Alabama’s farmers and livestock producers have been struggling to survive. Cutting red tape and providing our cattle and livestock producers with additional avenues to sell their Made in the U.S. products is a win,” Tuberville says. “We must ensure we are putting American farmers and livestock producers first, not last. I’m proud to join Senator Marshall in this legislation to support our family farms, small meat producers, and provide consumers easy access to all-American meat.”

A version of the DIRECT Act was introduced in the House as H.R. 547 in the 117th Congress (2021-22). A later version was introduced in the Senate as S. 1512 (in the 118th Congress, 2023-24).

“As we look at markets now and into the future, we should explore every opportunity to help family farms and ranches succeed. The DIRECT Act does just that,” Hyde-Smith adds. “It would give meat and poultry producers a safe, straightforward way to sell to consumers directly by making federal regulations work for them, not against them.”

According to the press release from Marshall’s office , many states, such as Vermont and Kansas, have state meat and poultry inspection (MPI) programs approved as at least equivalent to the standards established under the Federal Meat Inspection Act (FMIA) and Poultry Products Inspection Act (PPIA). These programs are overseen through audits by the USDA Food Safety Inspection Service (FSIS) to ensure there are no food safety concerns.

State inspection is often less expensive and preferable to very small processors.

MPI programs require food safety plans — Hazard Analysis Critical Control Point (HACCP) — and, similar to federally inspected processors, have inspectors on-site.

The release explains six facts about the DIRECT Act, which would:

Amend the retail exemption under the FMIA and PPIA to allow processors, butchers or other retailers to sell normal retail quantities (300 lb. of beef, 100 lb. of pork, 27.5 lb. of lamb) of MPI state-inspected meat online to consumers across state lines.
Allow new direct-to-consumer options for producers, processors and small meat markets.
Allow retail sales to consumers, minimizing the risk for further processing in export, keeping equivalency agreements with trading partners intact.
Allow states operating under the Cooperative Interstate Shipment (CIS) system to ship and label as they are currently.
Prohibit the export of the MPI product.
Not allow custom exempt processors to ship meat in interstate commerce.

Full text of the bill is available here .

Your Next Read: Direct-To-Consumer Act Would Aid Beef Producers

CAB Insider: Market Update Oct. 22

Thu, 23 Oct 2025 12:41:28 GMT

Federally inspected cattle harvest head counts have swung widely in the past three weeks, beginning with a 14,000 head decline two weeks ago as one fed cattle plant idled several days for scheduled upgrades. Last week’s recovery from the downturn pulled the week’s total 9,000 head larger than the six-week average.

Late last week, President Trump made statements about potential action to lower beef prices through purchases from Argentina. That brought an abrupt end to a precipitous nine-day run in which nearby Live Cattle contracts rose more than $13/cwt. without correction. Friday’s Feeder Cattle futures were limit-down and Live Cattle futures traded sharply lower as a result.

(CAB)

Follow-up trade early this week showed resiliency in futures prices as the market has shrugged off the President’s comments, regaining much of the price slippage incurred on Friday. For instance, the April 2026 Live Cattle contract touched the high-water mark of $250/cwt. last Thursday before settling $7.28/cwt. lower by Friday’s close. By Tuesday morning, a $3.05/cwt. recovery pulled the April contract up to $246/cwt..

Cash fed cattle prices last week showed no resemblance to Friday’s futures setback with fed cattle averaging $239.79/cwt., a $6.84/cwt. increase on the prior week. Seasonal increases in wholesale cutout values are expected to continue at least through the end of October. This potential, along with strong packer demand to capture a large head count last week, has propped up prices for now.

Heavy Lifting Ahead for Cutout Values

The typical October beef market is marked by a strong swing in carcass cutout values as a lull in demand follows Labor Day, sending cutout values to a seasonal low beginning in October. The turnaround happens quickly, with cutout values in early October 2% below the year’s annual average. By month’s end, prices averaged 1% above the annual average in the last three years.

In order for this pattern to repeat in 2025, the Comprehensive cutout would need to gain $10/cwt. in the next 10 days. This would be a fairly large lift, but not out of the question. One factor we must bear in mind is that 2025 wholesale carcass prices have varied widely within a range of $87/cwt. This compares to a much tighter average trading range of just $25/cwt. in the prior three years. This year’s Comprehensive cutout values are averaging 16% higher than last year, therefore, a 3% shift means a larger dollar value move than last year.

The above information seems less closely tied to potential fed cattle prices this season since a significant disconnect exists between cutout values and fed cattle values. Packers have, after all, run deep in the red for many months this year. Narrower margin losses do, however, encourage larger harvest levels.

(CAB)

A look at individual beef cuts and seasonal price trends for the fourth quarter reveals a few impactful cuts will shoulder the load toward higher prices. It’s evident that ribeyes and tenderloins come into focus for the holidays. Even so, the steep uptrend began in August for these items, leaving seemingly less upward lift available. Most would agree that despite current price levels, 20-30% higher than a year ago, new record-high prices are in the cards for early December.

Strip loins have continued to be sought after as the cheaper steak and roast item substitute for the holidays. Yet their growing popularity is holding strip loin prices on a higher plane this season. A few other items with impressive price points include shoulder clods and briskets, the latter of which are supported on smaller head counts and processer demand ahead of corned beef season.

A final optimistic note for cattlemen is the widening of the USDA Prime cutout price spread above USDA Choice; the latest spread is $57/cwt. This bolstered average Prime grid premiums to $22.42/cwt. earlier this month and comes at a time when Prime carcass production is seeing an uptick. Nebraska takes the prize among the largest packing states as feeders in the region are delivering 14.6% Prime carcasses to packers, a big move from the 10% level seen the same week last year. Kansas and Texas grade trends are similarly impressive, with Kansas up to 9.7% and Texas closing the gap at 8% Prime.