Processor

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.”

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JBS Announces Plan to Close California Plant

Mon, 15 Dec 2025 17:55:47 GMT

Swift Beef Co., a JBS subsidiary, plans to permanently close its case-ready production plant on Feb. 2, 2026, according to a Worker Adjustment and Retraining Notification (WARN) Act notice to the California Employment Development Department.

Located in Riverside, Calif., the closure will affect 374 employees.

“JBS USA has announced the planned closure of its case-ready production facility in Riverside, Calif., as part of a strategic initiative to optimize its value-added and case-ready business and simplify operations across its network,” says Nikki Richardson, a spokesperson for JBS, to Meat+Poultry . “Production for current customers will be transitioned to other JBS facilities, ensuring continuity of supply and service. The transition is underway and expected to conclude by early next year.”

The facility, located outside Los Angeles, processes beef for sale in grocers’ meat cases but does not slaughter cattle.

“As cattle numbers remain tight over the next two years, the packing industry is hampered by over-capacity,” says John Nalivika, Sterling Marketing Inc. president. “In response to negative margins that are partly a result of that over-capacity, plants will be closed as the industry begins to consolidate capacity and increase production efficiency. This will be a critical step in addressing negative margins, particularly as new plants are brought online with the latest technologies.”

Brad Kooima with Kooima Kooima Varilek says the closing should not have a big impact on the cattle market because it is a small cut and wrap plant and doesn’t do any slaughtering or initial processing.

Read More and Listen to Kooima’s comments
Cattle Hold Uptrend After Correcting with CA Plant Closure a Non-Event: Soybeans Fall Further

According to Reuters , “The company remains focused on delivering high-quality products and dependable service while strengthening its operational footprint to meet evolving market demands.”

JBS will shift production for its customers to other facilities, and workers will be eligible for jobs at other plants.

Last month, JBS projected its U.S. beef margins would likely tighten in the fourth quarter from the prior period due to the U.S. cattle shortage.

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

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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Do Foreign Powers Control Beef Prices?
Did Meatpackers Collude to Raise Beef Prices?
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Cargill Invests in Beef Business and Employees

Wed, 03 Dec 2025 00:48:09 GMT

Cargill continues to invest in its beef business and its employees despite challenging market conditions. The company hosted a ribbon cutting Tuesday for its $40 million workforce housing initiative, which includes 27 townhomes and an 81-unit apartment complex.

By addressing housing shortages, the company’s strategy is to reduce commute times and improve employee living options. Cargill’s investment is both strategic — to support workforce stability — and supportive of broader community improvement.

Jarrod Gillig, senior vice president of Cargill’s North American beef business, says Cargill’s commitment to nourishing the world is truly setting its employees and communities up for the future.

Cargill’s Fort Morgan employees have an opportunity to rent 27 townhomes that were built by the company to address the housing shortage near the plant.

(Provided by Cargill)

“One of the biggest issues we had is when new employees came to Fort Morgan, there just wasn’t housing available,” he says. “This was a huge opportunity for us, to make a better life for the employees. Nobody wants to sit on a bus for 45 minutes to an hour before and after work.”

Gillig says Cargill partnered with the community and businesses on a similar housing project near its Schuyler, Neb., plant. He explains the Fort Morgan project was undertaken by Cargill due to the “urgent need” and immediate impact on employees’ quality of life.

Located less that 10 minutes from the plant, the housing project reflects Cargill’s belief that employee well-being directly correlates to productivity, retention and overall organizational success. Gillig summarizes the project isn’t just about building housing options. It’s about building a supportive community and improving employees’ quality of life.

Cargill invested in its employees by building an 81-unit apartment complex and 27 townhomes in Fort Morgan.

(Angie Stump Denton)

Johanna Hernandez, Cargill’s Fort Morgan general manager, describes the housing project as transformative, noting around 60% of her team members come from outside of the Fort Morgan area.

Hernandez personally highlighted the project’s significance, noting her own experience of “struggling to find a place” when she moved to Fort Morgan in 2024 and seeing this as a way Cargill “puts people first” and embraces its core values.

Features of the apartment complex includes:

One-, two- and three-bedrooms plus some studios and suite-type apartments
ADA accessible apartments are available
1,700 sq. ft. of common area
Basketball area
Laundry facilities
Electric car charging stations
Nearby amenities include a gas station, fast food, school and hospital
A sidewalk from the complex goes under the highway and connects the housing project to a nearby park with a playground, city pool, baseball fields and tennis courts

Hernandez says the townhomes and apartments are available on a first-come, first-served basis. The complex is managed by Evergreen, an experienced third-party property management company, and employees must apply for rental.

Kevin Lindell, mayor of Fort Morgan, during the ribbon cutting emphasized the project’s importance, stating it epitomizes Cargill’s community commitment and helps solve the critical housing problem in small towns.

Cargill has also provided more than $500,000 in grants to local Fort Morgan nonprofits for childcare access and housing-related support.

In June, Cargill announced plans to invest nearly $90 million in automation and technology at its Fort Morgan beef plant over the next several years as part of its broader Factory of the Future initiative aimed at improving operational efficiency, yield and worker safety.

The company has already put $24 million into technology upgrades at the plant since 2021.

“The current market conditions remain challenging due to the cattle cycle and ongoing pressure on cattle numbers,” Gillig says. “However, we view this period as a pivotal opportunity to invest in our facilities for the future.”

Your Next Reads:
Cargill’s Fort Morgan Plant to Shut Down for 10 Days
Investing in the Future: Cargill Announces $90-Million Investment in Automation and Technology

Do Foreign Powers Control Beef Prices?

Tue, 25 Nov 2025 19:28:17 GMT

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

Opening Statements

Charge (Media/Prosecution): Foreign-controlled packers, principally JBS (Brazil), National Beef/Marfrig (Brazil), control the U.S. beef market. Their ability to own U.S. plants and import product from affiliated foreign operations allows them to shape domestic prices and supply to the detriment of U.S. producers and consumers.

Defense (Packers): Foreign ownership is material but not controlling on the total FI market (fed + non-fed). Ownership ≠ price-setting power. Observed prices, spreads, and margins follow fundamentals (herd cycles, capacity utilization, logistics, and retail stickiness), not nationality. Affiliated imports mostly fill lean-trim gaps and are constrained by U.S. regulation and buyer standards.

Ground Rules

Relevant market.

Media: Fed-cattle (steers/heifers) slaughter = the price-setting core for boxed beef.
Packers: Total FI beef (fed + non-fed), measured where procurement is actually contested; regional draw areas (~150–250 miles), not a single national auction.

Burden of proof. Durable market power must be shown in outcomes (prices, margins, spreads) beyond what fundamentals justify. “Foreign ownership” alone is not dispositive.

Facts Not in Dispute (scope and shares)

Fed segment is concentrated; the “Big 4” dominate fed throughput.
On total FI (fed + non-fed), concentration falls meaningfully vs. fed-only snapshots.
Directionally, recent plant-level rollups place JBS as the largest single foreign owner on total FI, National Beef (Marfrig) comes in second.
In many recent years, JBS + National together land in the low–to–mid-30% of total FI production (varies with actual utilization).
Exact annual percentages require a plant-by-plant capacity and realized-throughput table (fed vs. non-fed) for the year in question.

The Media’s Case (Defendant)

Count 1 — Structure & foreign control

Two of the dominant fed packers are foreign-controlled (JBS, National/Marfrig). Combined, foreign parents anchor a large footprint in the price-setting fed segment.

(The Big Bad Packer)

They went from owning 0% of production in 2006 to 34% in 2025

Count 2 — Affiliated imports as a lever

Foreign parents can toggle import flows (e.g., Brazil 0201/0202 muscle cuts; 90CL lean trim) while operating U.S. plants, giving them portfolio options to stabilize boxes and potentially dampen cattle bids in tight windows.

Count 3 — Thin spot + AMA dependence

Negotiated cash is thin in several regions; AMAs/formulas benchmark off LMR spot. In a high-CR4 environment, small scheduling/basis moves by large foreign-controlled firms could nudge a thin benchmark that prices a much larger formula volume.

Count 4 — Shock episodes

Holcomb and COVID produced spread blowouts when capacity buckled. With few owners of chain speed, bottlenecks translate to wider spreads and weaker bids—the pattern, says the Media, of power in action.

Media’s ask: Conclude that foreign-controlled owners possess market-shaping power in fed cattle, reinforced by affiliated imports and thin cash discovery.

The Packers’ Case (Plaintiff)

Count 1 — Market definition & actual shares

“Control of U.S. beef” must be judged on total FI. On that basis, foreign-controlled share is sub-majority and variable; regional draw areas show multiple active buyers with rivalry fluctuating on logistics/outages.
Looking at fed beef slaughter alone, foreign ownership is still well below a majority share (~34%).

(Big Bad Packer)

Other industries (cellular service, Beer) share similar foreign ownership percentages with little to know concern over foreign dominance.

Count 2 — Imports are a composition valve, not a control lever

Most imports into the U.S. complex are lean trimmings (90CL) that balance grinds when non-fed supply is short; supporting retail ground beef, not suppressing fed bids nationwide.

(The Big Bad Packer)

Imports have increased in recent years, as domestic production has curtailed; helping to cure the imbalance of low trim availability for ground beef.
Imported muscle cuts face tariffs/quotas/inspection and retailer specs; they compete rather than dictate.

Count 3 — Outcomes track fundamentals, not nationality

Live ↔ wholesale co-move; spreads widen when utilization falls and compress as chain speed normalizes.
Retail is the enduring spread (category management, labor, packaging, shrink).
Margins cycle and loss periods; incompatible with the idea that foreign owners can set prices at will.
Our bid-dispersion work shows breathing competition, not the near-zero compression you’d expect under coordination.

Count 4 — Owning U.S. plants and importing can be pro-supply

Dual roles increase supply reliability (backfilling shocks, balancing trim needs). All imports must clear FSIS/CBP/LMR and commercial buyer programs; related-party transactions are scrutinized in audits and filings.

Packers’ ask: Foreign ownership ≠ control. Measured on total FI and regional rivalry, the data (dispersion, utilization-linked margins, retail lag) contradict the control thesis.

Character and Governance (Neutral Sidebar)

JBS/J&F bribery history (Brazil) & U.S. context.

Public record shows bribery-related admissions/settlements with Brazilian authorities and FCPA-related resolutions; these events overlap periods of international expansion, including U.S. acquisitions.
JBS has stated it implemented compliance enhancements (ethics programs, third-party controls, internal monitoring).

Why it matters (media’s angle):

Governance failures heighten concerns that global cash flows and portfolio positioning (imports + U.S. plants) could be opportunistically timed to influence markets, warranting enhanced transparency.

Why it isn’t dispositive (packers’ angle):

Misconduct abroad does not prove U.S. price control. U.S. operations face FSIS, CBP, LMR, DOJ/FTC, SEC oversight and retailer audits. If control were exercised, we’d observe persistent supranormal margins and abnormally tight bid dispersion outside shock windows. BOTTOM LINE: we don’t.

Jury Instructions (Deciding Tests)

Shares: Are JBS + National a majority on total FI production? (If no, control of U.S. beef is hard to sustain.)
Dispersion: Do regional bids show abnormal compression beyond freight/quality/utilization?
Utilization model: Do margins/spreads normalize as capacity returns?
Import-timing test: Do affiliated imports systematically depress bids after controlling for composition and retail lag?
Governance relevance: Credibility concerns justify transparency, but they must be corroborated by outcomes to prove control.

Verdict (Reasoned)

Foreign ownership: Material but not controlling on total FI. Fed is concentrated; total FI is less so.
Affiliated imports: Mostly a composition valve (lean trim, timing); not shown to be a standing price lever once fundamentals are controlled.
Outcomes: Bid dispersion breathes, margins cycle (including loss periods), spreads track utilization and retail; not a durable, nationality-based control mechanism.
Governance: JBS/J&F history elevates scrutiny and supports transparency reforms, but it does not establish market control on its own.

Finding: The claim of foreign control of U.S. beef as a durable, market-wide pricing power is not proven on the economic record. Heightened transparency and compliance are warranted; a verdict of control is not.

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

Your Next Read: Did Meatpackers Collude to Raise Beef Prices?
You Be The Judge: The Big Bad Beef Packers Are On Trial

Tyson Foods to Close Lexington, Neb., Beef Plant

Fri, 21 Nov 2025 21:43:35 GMT

Tyson Foods today announced network changes designed to right-size its beef business and position it for long-term success. The company will end operations at its Lexington, Neb., beef facility and convert its Amarillo, Texas, beef facility to a single, full-capacity shift. To meet customer demand, production will be increased at other company beef facilities, optimizing volumes across its network.

The Lexington plant, which operated for 35 years, employs nearly 3,200 people and can slaughter almost 5,000 cattle a day, according to industry estimates. It is one of 11 beef segment facilities in the company and one of the largest. Another 1,700 workers will be impacted in Amarillo.

Tyson Beef Division Faces Losses
In the latest U.S. Security and Exchange Commission report Tyson Foods reported operating loss for the beef division of $1.135 billion for the fiscal year ending September 27, 2025 with adjusted operating losses of $426 million also released by the company. Tyson reported its cattle costs were up $1.575 billion versus a year ago.

For 2026, Tyson projects additional losses in its beef division. In a Nov. 10 news release the company stated that USDA projects domestic beef production will decrease approximately 2% in fiscal 2026 as compared to fiscal 2025. Therefore anticipate adjusted operating loss is estimated between $(600) million to $(400) million in fiscal 2026.

Beef Packing Industry Faces Negative Margins
“As I have commented several times this year, a packer or packers would eventually reduce capacity,” says John Nalivka of Sterling Marketing. “Capacity is critical to the success of any business with the natural economic incentive to increase capacity to gain economies of scale and reduce per unit costs. Sharply reduced cattle numbers became the downside of economies of scale for packers in the face of significant herd liquidation that took the cattle inventory to its lowest numbers since 1951.

Nalivka says the packing industry has been reducing absolute capacity since 2000.

“Fed plants have still been operating at an average of 78% utilization this year compared to the low-to-mid 90% range from 1994-2008,” he adds.

Industry Faces Historically Tight Cattle Supplies
Record fed and feeder cattle prices during 2025 have been a result of a 70 year low in the cattle herd tied to consecutive years of drought in major cattle producing regions of the United States. The supply was recently constricted even further by the closure of the Southern border to Mexican feeder cattle to prevent New World Screwworm (NWS) from entering the U.S. Plus, the 50% increase in tariffs on Brazilian beef in mid-August nearly shut off imports of lean trimmings and grind which are blended into ground beef.

The rebuilding of the U.S. cow herd has also been slower than expected due to a number of factors including the older age of producers, higher interest costs and the desire of cattle producers to pay down debt. That has all attributed to less heifer retention.

Negative Reaction
In a news release from the company, Tyson Foods said it recognizes the impact these decisions have on team members and the communities where we operate. The company said it is committed to supporting its team members through this transition, including helping them apply for open positions at other facilities and providing relocation benefits.

Nebraska Senator Deb Fischer (R), who also serves on the Senate Agriculture Committee, released a statement following the announcement.

“I am extremely disappointed by this news from Tyson today. As the single largest employer in Lexington, Tyson’s announcement will have a devastating impact on a truly wonderful community, the region, and our state. Nebraskans are nothing if not resilient, and Lexington has a robust workforce. I hope their skill and experience will be sought after by other employers.

Senator Deb Fischer (R-NE)

With these changes, Tyson Foods says it is ensuring it will continue to deliver high-quality, affordable and nutritious protein for generations to come.

The plant is scheduled to close on Jan. 20.

Did Meatpackers Collude to Raise Beef Prices?

Thu, 20 Nov 2025 16:18:37 GMT

The rhetoric has been loud — the data has been quiet. Today we put “packer collusion” on trial. The question isn’t whether spreads spiked (they did), or whether concentration exists (it does). The question is whether the spikes were the product of an agreement rather than the predictable result of herd cycles, external events and plant utilization.

The Charges

Count 1 — Price-fixing (Sherman Act §1). An agreement among packers to raise or stabilize prices for beef products, while simultaneously lowering prices for cattle.

Count 2 — Output restriction. An agreement to reduce slaughter/chain speeds to elevate wholesale prices.

Count 3 — Bid suppression/market allocation. An agreement to limit competition for cattle (fewer bids, coordinated schedules, regional allocation).

Legal standard (what must be proved):

Agreement (express or tacit) + anticompetitive intent/effect
Evidence must overcome alternative explanations (supply, utilization, demand, shocks).
Civil = preponderance of the evidence; Criminal = beyond a reasonable doubt.

Prosecution’s Case (what would be needed to convict)

1. Direct evidence (smoking guns)

Emails, messages, calls or meeting notes discussing prices/volumes/bid strategy/kill schedules.
Trade-association sidebars where competitively sensitive forward data are exchanged.

2. Economic fingerprints that don’t wash out with fundamentals

Sustained super-normal profits across multiple years after COVID/outages, materially above cost of capital.
Spread persistence: live↔cutout spreads remain abnormally high once utilization normalizes.
Price convergence: regional bid dispersion collapses nationwide even after controlling for freight, quality, weather, and distance to plant.
Coordinated capacity discipline: parallel slowdowns or kill cuts not attributable to labor, maintenance, or regulation.
Procurement anomalies: bid rotations, unusual “no-bid” patterns across buyers, punishment for undercutting.

3. Patterns around non-fundamental dates

Spreads jump around communication or lawsuit milestones but NOT around observable shocks (fires, labor, black swan events).

Defense’s Case

Exhibit A: Ground Beef Price vs Cattle Price

(The Big Bad Beef Packer)

Fact: Wholesale & cattle track; as cattle prices rise and fall, so do wholesale ground beef prices.
Data points: Only major deviation occurred during COVID, when store shelves were cleared out and production capacity experienced a major shock.
Interpretation: Wholesale ≠ packer margin; category management, labor, and packaging explain much of the higher wholesale gap.

Exhibit B: Operating Margins - Oligopolies

(The Big Bad Beef Packer)

Fact: Packer margins rise and fall with herd expansion, market shocks, and capacity constraints. Other oligopolies, such as wireless carriers, see similar price changes; albeit at a higher operating margin level.
Interpretation: If a beef “cartel” existed, you wouldn’t see loss years; losses are consistent with rising cattle costs outpacing cutout during tight supply + throughput frictions. Further, oligopolies see fierce competition, which, when kept in check, produce better quality and a cheaper value for consumers.

Exhibit C: Price Spreads

(Economic Research Service - Meat Price Spreads)

Fact: Wholesale to farm meat spreads have seen only modest increases over the past 50 years; COVID is the outlier. Retail to wholesale spreads tell a completely different story.
Interpretation: What farmers are paid for cattle and packers are paid for beef align across more than half a century (outside of COVID). Contrarily, the price consumers pay at the retail counter has been a runaway train.

Exhibit D: Beef Dollar by Industry Segment

(Economic Research Service - Meat Price Spreads)

Fact: From 1970 to 2025, packers’ % of the beef dollar has decreased 7%, farms’ % of the beef dollar has dropped 10%, while the retailer has increased 18%.
Interpretation: Prior to packer concentration concerns, 1970-1980, the packers’ % of the beef was 12%. From 1981 to 2025, the average drops to 9%. While a modest bump was seen in the years following the last cattle cycle downturn (2013-2015), the past 10 years were only 12%.

Observed facts that CONTRADICT a cartel:

Spike & reversion: Spreads fall back as utilization recovers.
Regional dispersion: Basis/bids vary by region and plant outages.
Loss years: Public P/L shows red ink; cartels won’t tolerate that.
Retail stickiness: Category pricing and costs break any 1:1 pass-through story.

Jury Instructions (how to weigh the case)

Step 1: Do utilization, herd, and shocks explain the lion’s share of spread variation?
Step 2: After controlling for these, is there a durable, unexplained elevation consistent with agreement?
Step 3: Do we have direct communications or procurement anomalies consistent with coordination?
Step 4: Do profits remain consistently super-normal across normal periods?

If the answer to Steps 2–4 is no, reasonable doubt remains.

Verdict

Count 1 (Price-fixing): Not Proven. The clearest spread spikes coincide with capacity shocks (Holcomb, COVID) and herd dynamics; spreads compress as plants normalize. No durable, post-shock elevation or persistent super-normal profits are shown in the long-run data.

Count 2 (Output restriction): Not Proven. Throughput reductions align with cattle availability/labor/safety/maintenance realities. We lack evidence of coordinated slowdowns absent operational and cattle inventory causality.

Count 3 (Bid suppression/market allocation): Not Proven. Regional dispersion and loss years undermine a national coordination story. Absent documentary evidence or procurement anomalies, the burden is unmet.

Final finding: The price behavior is best explained by herd cycles + utilization + retail stickiness. The prosecution has not cleared the economic or legal bar for collusion.

“Sentencing” (reforms that actually help)

Even with a “Not Proven” verdict, the system can work better. Apply remedies that lower volatility and raise trust:

Spread transparency: A consistent, public gross spread definition (Comprehensive Cutout + Drop − 5-Area Live) published monthly.
Data access: Encourage scanner data and regional basis publication, with clear methodology notes.
Voluntary labeling: Keep MCOOL program-based and auditable; don’t sell it as a price-lowering tool.
Targeted trade tools, not blunt ones: Avoid broad Section 232 quotas/tariffs that raise consumer prices on lean trim without fixing supply.

Closing

The market doesn’t need a scapegoat to explain beef prices. It needs throughput, better transparency, and a shared understanding of the facts.

When we measure the right things — herd size, utilization, spreads, and the composition of imports — the picture is coherent.

That’s the truth. It’s less thrilling than a soundbite and far more useful to ranchers, feeders, packers, retailers, policymakers, and consumers.

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

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

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

Unpacking the Beef: Report Clarifies Cattle Market Realities, Packer Challenges & Trade Tensions

Fri, 31 Oct 2025 20:17:58 GMT

Since President Donald Trump’s comments last week, a lot has been discussed on social media and at the coffee shop about increasing beef imports from Argentina, beef retail prices, the cattle market and beef processing concentration.

“It is complicated,” the Meat Institute posted on LinkedIn regarding the current state of the beef industry and the dialog about beef prices. In response, the Meat Institute released a nine-page document — The Reality of Beef and Cattle Markets — addressing import trends, market conditions, industry concentration, ground beef production, policy proposals and international trade challenges.

Key discussion points include:

1. Argentine Beef Imports

The report summarizes increasing beef imports from Argentina is unlikely to significantly lower ground beef prices in the U.S. If Argentina fills the proposed 80,000 metric ton quota, it will only increase its share of U.S. beef imports from 2% to 5%, which is unlikely to significantly impact retail or restaurant beef prices.

Argentina primarily exports grass-fed frozen lean trim for ground beef production, with limited impact on overall U.S. beef imports. In 2024, Argentina was the eighth-largest beef supplier to the U.S., exporting 32,798 metric tons, while the U.S. imported 1.56 million metric tons overall.

2. Beef and Cattle Market Conditions

The report summarizes current market conditions with these six statements:

Cattle producers are enjoying record prices, while beef packers are suffering under negative margins.
The shortage of market-ready cattle continues, adding further pressure to packers’ margins, which first dropped to negative values in September 2024.
Packing plant utilization rates have dipped, and some facilities are scaling back operations, including reduced shifts and shortened workweeks. Uncertain immigration policy moving forward can have an impact here as well.
Trade policy uncertainty from proposed tariffs adds to the cost pressures on the cattle market.
Additionally, foreign animal disease import restrictions — particularly on Mexican feeder cattle — are another contributing factor to increasing costs.
Consumer demand has remained resilient with improved beef quality. However, prospects for elevated cattle prices and the beef those cattle yield remain directly tied to the extent end-user consumer demand can remain robust.

“Cattle prices were at record levels for most of 2023, surpassing the 2014-2015 previous record highs as the cattle herd rebuilt from the previous low points of the cattle cycle,” the report says. “Through 2024, prices continued at new record levels and increased further into 2025, exceeding an average of $242 cwt. in August, the highest nominal price on record.

“Cash prices have declined to $232 cwt. in the first two weeks of October, but futures contracts are at record levels, even after adjusted for inflation. The previous highs in October 2015 would be $222 cwt. in today’s dollars, a full $10 cwt. below the current prices as of Oct. 14.”

The report goes on to say: “This has put U.S. beef packers under financial pressure. 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 packer margin of negative $165.96 per head.”

(Meat Institute)

For 2025, cow-calf producer margins are estimated to be up 122.3% from 2024 and 180.67% from 2023 to $900 per head. Feedlot margins are estimated to be up 351% from 2024 to $514.33 per head. But packer margins have declined 120% from already negative margins in 2024 and are estimated to be down 269% from 2023.

“With fewer market-ready cattle available, plant utilization rates have dipped and some facilities are scaling back operations, including reduced shifts and shortened workweeks. Packing plants were operating at 77% capacity for the week of Oct. 4, down from 85% a year ago. Uncertain immigration policy moving forward can have an impact here as well,” the report summarizes.

(Meat Institute)

The share of the retail beef dollar also indicates producers have been faring well. The producers’ share of the retail beef dollar was 55% in August 2025 and has averaged 54% so far in 2025. The packers’ share has dropped from 13% to 5%, reflecting the negative packer margins.

Download the Meat Institute’s full Cattle and Beef Market Update .

3. Concentration in the Beef Packing Sector

“The U.S. meat packing sector is a dynamic, resilient and highly competitive industry with a long history of providing an abundant supply of high quality, safe and affordable products to American consumers and serving as a vital economic engine that supports America’s farmers and ranchers,” the report says.

(Meat Institute)

The top four beef packers in the U.S. account for the purchase and slaughter of about 81% of all fed cattle in the U.S., according to the most recent report from the USDA’s Packers and Stockyards Division. But those fed cattle make up only about 78% of the Federally Inspected cattle slaughtered in the U.S. The other 22% is made up of cows, both dairy and beef and some bulls.

“Much of the rhetoric about beef industry concentration implies that consolidation in the beef packing sector is ongoing and that market power is becoming increasingly concentrated. That is not the case,” the report says. “The four-firm concentration ratio in the beef cattle industry has not changed appreciably over the past 30 years. According to USDA, in 1994, for example, that ratio was 82%, compared with 81% today.”

4. Ground Beef

Ground beef accounts for approximately 50% of U.S. beef consumption. Imported lean trim complements U.S. beef production from cull cows, helping maintain affordability without directly competing with domestic beef.

“Without imported lean trim, more highly marbled quality U.S. beef would be used, and ground beef would be more expensive,” the report explains.

5. Policy Issues

Despite record cattle prices and the smallest cattle herd in 75 years, there are increasing calls for mandatory country-of-origin (COOL) labeling for beef.

“The mandatory COOL experiment was implemented and it failed,” the report says. “From 2002 through Congress repealing the law in 2015, we learned that mandatory COOL adds massive compliance costs — the industry incurred implementation costs of approximately $1.5 billion, plus $200 million in additional annual compliance costs thereafter — yet by USDA’s own analysis, it did not increase consumer demand. Mandatory COOL simply adds cost, not value.”

On Jan. 1, 2026, USDA’s Food Safety and Inspection Service will begin implementing its voluntary COOL rule.

“Let the rule and the free market work: if consumers demand ‘Product of the U.S.’ labels on their meat, then processors can and will provide it,” the report says.

For more info, download the Meat Institute’s mCOOL paper .

The reports also explains proposals like the PRIME Act and interstate shipment of state-inspected meat are seen as threats to food safety and international trade relationships.

“The concept in the PRIME Act is even worse,” the report explains. “Under Rep. Thomas Massie’s legislation, custom exempt meat establishments would be allowed to slaughter animals, process the meat and sell it directly to consumers or to restaurants, hotels or grocery stores within the state, without any inspection. It is a recipe for foodborne illnesses, and consumers in restaurants and hotels would have no idea they would be eating uninspected meat (and grocery store consumers would only know if they look for and can’t find the USDA inspection symbol). Food safety should be the top priority, not something legislated away.”

6. China Beef Exports

The Meat Institute urges action as China blocks more than 415 U.S. beef facilities from exporting.

“In 2024, China was the U.S.’s third largest market, by value, for beef, at over $1.5 billion,” the paper summarizes. “The strong beef exports to China were thanks to President Trump’s leadership in securing the U.S.-China Phase One Agreement during his first term. However, since the beginning of 2025 — and in contravention of the terms of the Phase One Agreement — China has failed to renew the registrations for more than 415 U.S. beef establishments, making them ineligible to export to China. This is a massive market loss for the U.S. that Brazil and other countries have been eager to fill.”

A Check in on the Beef Cutout

Tue, 14 Oct 2025 11:48:04 GMT

The current government shutdown has caused many weekly and monthly reports to not be published. However, USDA-AMS is still generating their daily and weekly reports.

The beef industry knows that tight supplies have led to increased price movements over the last couple of years, but beef demand has become a hot topic as of late due to retail beef prices continuing to set all-time highs every month.

These market movements have led to a common question, “could demand be decreasing and that’s why the cutout has been decreasing?” One data series that offers valuable insight into the intersection of beef supply and demand is the cutout value.

Figure 1: Weekly Choice Cutout Value

(USDA-AMS)

Figure 1 shows the weekly Choice cutout value for this year, last year and the previous 5-year average. In mid-September, the Choice cutout peaked at $413.60/cw.t, has steadily decreased each week, and finished last week at $365.25/cwt.

This decline is somewhat expected due to seasonality trends. However, last week’s price was $56.82/cwt. (18.4%) and $113.57/cwt. (45.12%) higher than last year and the previous 5-year average for the same week. Even though the market has experienced peaks and recent declines in the Choice cutout value, year-over-year demand indices suggest historically strong demand as consumers pay higher prices for the smaller amounts of beef available.

Figure 2: Monthly Graded Cutout Values

(USDA-AMS)

Consumers make choices not only between cuts of beef but also grades of beef. Figure 2 shows the monthly cutout values by grade for the last 12 months. Since March of this year, each cutout grade has trended upward through September.

Interestingly, the last two months have also had increasing spreads between Prime and all other grades. To the question posed in the introduction paragraph, there is little data to suggest weakening demand. Tight beef supplies are driving prices higher and consumer demand is holding strong.

Consumers will eat less beef overall in 2025 due to less availability, but the higher prices will allocate the various grades and cuts of beef to consumers.

— Charley Martinez,Parker Wyatt and David Eli Mundy, for Southern Ag Today

Cargill’s Fort Morgan Plant to Shut Down for 10 Days

Thu, 02 Oct 2025 21:39:45 GMT

As part of Cargill’s ongoing investment strategy at its Fort Morgan, Colo., beef processing facility, they are undertaking a major project focused on maintaining the mechanical integrity of the refrigeration system.

This work will result in planned downtime for approximately 10 days starting Friday, October 3.

“We are working with local producers and will shift production to other beef facilities within our broad supply chain footprint to minimize any disruptions,” says Jarrod Gillig, senior vice president of Cargill’s North American beef business.

Cargill plans to continue to operate all of its beef processing facilities business as usual. And announced there will be pay continuation for facility employees.

In June, Cargill announced plans to invest nearly $90 million in automation and technology at its Fort Morgan beef plant over the next several years as part of its broader Factory of the Future initiative aimed at improving operational efficiency, yield and worker safety.

“The current market conditions remain challenging due to the cattle cycle and ongoing pressure on cattle numbers,” Gillig says. “However, we view this period as a pivotal opportunity to invest in our facilities for the future. Our planned downtime in Fort Morgan is a strategic part of our continued investment across our beef operations.”

Your Next Read: Investing in the Future: Cargill Announces $90-Million Investment in Automation and Technology

Are We Seeing Signs of Herd Rebuilding?

Fri, 12 Sep 2025 19:49:16 GMT

The U.S. beef cow inventory has reached its lowest point since 1962, marking what appears to be the bottom of the current cattle cycle. Tight supply is driving the strong pricing environment beef producers are enjoying today.

“For cow-calf producers right now, things are as good as they’ve probably ever been,” says Troy Rowan, University of Tennessee assistant professor. “Even though things are really good, producers are conscientious and vigilant about potential challenges,” Rowan summarizes.

Agreeing with Rowan, South Dakota cattleman Ken Odde adds while profits are currently strong, inflation quickly erodes economic gains. He stresses the importance of risk management and diversification.

Early Signs of Herd Rebuilding?

This is the million-dollar question: Are there encouraging signs of expansion?

“The beef industry is not currently in herd expansion mode, with producers hesitant to retain heifers due to high costs and economic uncertainties,” says Dave Weaber, Terrain senior animal protein analyst.

In Drovers State of Industry Report to be released the week of Sept. 15, we breakdown the July USDA cattle inventory and cattle on feed reports. While the USDA reports showed the smallest U.S. herd in history and continuing tightening numbers on feed, analysts predict producers have not experienced the highest cattle prices, yet.

“Our national herd size has the industry at an interesting point,” Rowan says. “Prices are at all-time highs, inputs are reasonable and more cow-calf enterprises are profitable than ever. When the industrywide rebuild will happen remains up in the air, but producers are keeping in mind that the high-flying industry right now is not going to stick around forever. They’re starting to adopt new technologies, leveling up their crossbreeding programs and expand opportunities for non-cattle related income on their ranches.”

Weaber adds producers need to be intentional about herd expansion, understanding the financial implications of adding new cattle.

Beef-on-Dairy Fills the Beef Supply Gap

“The current dynamics of supply is going to be a challenge,” says Jarrod Gillig, Cargill senior vice president, managing director for beef.

Gillig summarizes the cattle industry is experiencing a critical period of transition. He doesn’t expect the cow herd to return to previous peak levels of 32 million head. Instead, he predicts the gap in supply will be filled by beef-on-dairy calves.

Nick Hardcastle, Cargill senior director of meat grading and technical specialist, explains how the beef-on-dairy calves are an upgrade to the traditional Holstein steer and the positive impact they are making on beef supply.

“Beef-on-dairy is more desirable because it helped overcome several Holstein difficulties,” he says. “Improvements include red meat yield — more meat to a consumer — as well as improved acceptance in branded programs.”

Hardcastle says the beef-on-dairy cattle are filling the supply gap by filling pens in the Plains states where feeders are needed, and they are widely accepted by feeders and packers.

Defining Future Beef Producer Success

Odde says the beef industry is not just surviving but positioning itself for significant transformation.

“Producers who remain flexible, technologically savvy and strategic in their approach will be best positioned to thrive in this changing environment,” he says.

Weaber agrees saying successful producers will be those who can adapt, manage costs effectively and align themselves with evolving market trends.

“Don’t let cost get away from you,” Weaber warns, emphasizing that “being a low-cost, high-productivity producer means you get to make money seven, eight or nine years of the cycle.”

He stresses the importance of understanding financial implications, particularly during market transitions.

“If we’re not working on the business, we can’t work in the business,” Weaber adds, summarizing his philosophy regarding producers’ need to adopt more strategic, data-driven approaches.

The State of the Beef Industry Report includes input from nearly 500 beef producers. The annual report provides information to help producers when making decisions. Click here to download the full report.

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How Today's Market Dynamics are Reshaping Ground Beef Supply

Fri, 22 Aug 2025 13:02:31 GMT

U.S. beef imports help balance domestic lean and fat trimmings supplies. The key shift is not just fewer cows, but also heavier fed cattle carcasses producing more fat trim.
Together, those changes tilt the U.S. trim supply toward fat.

Domestic lean trim supplies are down because of lower cow slaughter. Through June, combined beef and dairy cow slaughter is down 13%, translating to an estimated 10% decline in domestic lean trimmings production.

Lean trimmings from cull cows and bulls are the primary source of 85s and 90s used in ground beef. At the same time, fed steer and heifer dressed weights remain historically high.

Through June, fed cattle slaughter is down 4%, but dressed steer weights are up 3%, adding more pounds of fat trim. The net result is a trim market with proportionally less lean and more fat.

With cow slaughter down and fed cattle dressed weights up, imports of lean trim become essential. So far in 2025, imports are sharply higher, up 28% in June and 33% year to date, and most of those imports are lean trimmings.

Brazil was the leading source through the first half of the year, accounting for 25% of total U.S. beef imports, though tariff increases will limit volumes going forward. This places more emphasis on other suppliers such as Australia and New Zealand, where year-to-date imports are up 35% and 8%, respectively.

Imports of lean trim help balance the U.S. beef trimmings market. Otherwise, an adjustment occurs through higher prices that ration limited lean trim across end users. This means higher ground beef prices for consumers.

Genetic Merit Scorecard: A Measuring Stick for Premiums Offered by National Beef

Thu, 07 Aug 2025 17:57:11 GMT

There’s a first for everything, and for the first time producers earned premiums on the U.S. Premium Beef LLC (USPB) Kansas grid based on the genetic merit of their cattle, starting in August 2024. One year later, the Genetic Merit Scorecard℠ (GMS) remains the measuring stick for these National Beef Packing Co., LLC (NBP) premiums on the USPB grid.

“It’s predictable, consistent quality,” says Chad Barker, NBP vice president of cattle procurement. He adds that the GMS allows them to forecast and sell that quality with some confidence, because of the predictive power of the tool.

“For us, this year’s been more about validating what we expected from a performance perspective, and does it line up with our value-added business; and it does,” Barker says. “To me, those things are both really positive. That makes it sustainable, and this program will probably continue to evolve as we learn and know more moving forward.”

The GMS is one of the AngusLink℠ value-added programs administered by the American Angus Association^® (AAA) in partnership with IMI Global and Where Food Comes From, and it objectively describes performance potential across four areas using a range from 0 to 200, with the industry average being 100.

The Genetic Merit Scorecard^SM allows producers to objectively differentiate the performance potential of their calves using a range from 0 to 200, with the industry average being 100. A Beef Score of 100 or greater can earn a premium on the U.S. Premium Beef LLC Kansas grid.

(American Angus Association)

The GMS Beef Score specifically predicts genetic potential for feedlot performance and carcass value and is calculated using the Association database and genetic information on sires and the cow herd. For producers and feeders, cattle harvested August 5, 2024, and later with a Beef Score of 100 or greater on the AngusLink℠ GMS can earn a grid premium of $5 per head. In December 2024, a second grid premium — $10 per head for cattle with a GMS Beef Score of 150 or greater — took effect, while those scoring 100-149 continued to receive the $5 per head premium.

These premiums have been in addition to all other premiums and discounts available based on grading and carcass performance and are exclusively available for cattle marketed through USPB and delivered to NBP plant locations in Liberal and Dodge City, Kansas.

Predictable performance

Barker says NBP has been pleased with the quality of cattle qualifying for these premiums.

“I think all but maybe four pens have been really high prime,” he says. “That’s something we would not be able to sort out or find without the scorecard.”

Troy Marshall, AAA director of commercial industry relations, says the cattle going into the program have been extremely good, averaging close to 150 for their GMS Beef Score.

Brian Bertelsen, USPB vice president of field operations, explains the cattle with a GMS going through the USPB grid have been well-above average. Looking at data from August 2024 through mid-February 2025, more than 44% have been Prime. The average for the industry is 11% Prime.

These qualifying cattle have averaged more than $200 per head premium over selling in the cash market, Bertelsen says. As a reference, the non-GMS or USPB average premium during the same period was a little more than $100 more than if those cattle were marketed on the average cash, live market in Kansas.

Bertelsen shared that overall, these cattle have excelled in all areas except for Yield Grade 4s and 5s, with those being higher than average for the USPB grid. Their average live weight was close to 100 lb. higher than all other USPB cattle.

“The better your genetics are for marbling, the longer you probably ought to feed them to let them do what you designed them to do,” he says.

Barker says the traceability component of this is something they like, but it’s also something that has not fully developed yet.

“We like being able to share and make progress and make improvements,” he explains. “We just have to find out what’s an effective mechanism for sharing and communicating it.”

Room to grow

At the one-year mark, Barker said the main challenge is getting enough volume consistently. Since January 2025, the number of cattle with the GMS being harvested at NBP has increased compared to the first several months of the program, but there is room and demand for more cattle.

“As long as we can continue to show a little incremental margin, we’re going to be committed to growing it, and we know most good things take time,” Barker says.

To qualify for the GMS, calves’ sires must be predominantly (50% or more) registered Angus and 75% of the bull battery must be registered.

“I know the guys that feed them like them,” Barker says about AngusLink cattle. “Then they bring a pretty big grid return.”

Marisa Kleysteuber, managing partner of Triangle H near Garden City, Kansas, estimates between half to two-thirds of the cattle at their feedyard are enrolled in AngusLink, and 50% of those are customer cattle. The rest are owned by Triangle H and K Ranch. Most of the cattle fed at their yard are marketed on the USPB grid.

“The GMS AngusLink program definitely rewards producers for producing high-quality beef,” she says. “Our focus is the consumer and producing what the consumer wants; and they’ve clearly said they want high-quality beef. I think it’s exciting that there’s another program out there that is rewarding the cow-calf producers for their willingness to focus on high performance, quality cattle.”

Tracking cattle with the GMS to earn grid premiums, “it makes it a little more challenging, and we’ve had to adjust our management some with how we’d typically sort our cattle,” she said. Other adaptations have included making sure all AngusLink certificate numbers are listed on the showlist for National Beef and providing that information two weeks ahead of harvest instead of one.

“This is just another way to send the market signals, and every dollar helps,” Kleysteuber said.

Who’s participating?

Before these grid premiums were added, people retaining ownership of their cattle through the feeding phase did not have much incentive to enroll in the GMS program outside of benchmarking their genetic progress.

“They now have a financial incentive,” says Doug Stanton, IMI Global senior vice president of sales and business development. “They can see in the US Premium Beef grid that they can earn an additional $5 or $10 a head based on their Genetic Merit Scorecard on the Beef Score specifically. In most cases it’s been eye-opening for them from the standpoint that cattle were maybe better than they thought they were.”

Many of those who earned premiums this past year have been those already comfortable with marketing cattle on the USPB grid or retained ownership.

“It’s really nice that those people can get a little bit more premium, a little bit more recognition,” Bertelsen says. “We can even better identify them in our data and recognize them with the higher premiums for the cattle that are truly genetically designed for our system.”

Stanton says he anticipates new participation coming through USPB members buying cattle with the GMS, placing them in a USPB yard and then delivering them to NBP. Bertelsen agrees and adds that more will also participate during the second year simply because they will have heard more about it.

“Moving forward, we sure hope that more cattle feeders and feedlots will step out and buy AngusLink GMS-enrolled feeder cattle to really boost the volume of cattle,” Bertelsen says. “The grid system really works. If you offer a carrot — in other words, a premium for the producer — at least some of them will chase that and achieve it.”

Bertelsen recognizes it is a challenging time to ask feeders to do that, given the current cattle supply.

“They certainly know and appreciate that genetics makes a difference,” he says. “If the record-high prices of feeder cattle postpone their stepping out and buying these cattle, that’ll change. This cattle cycle will come around eventually.”

For those ready to take the next step, he says he is quick to remind producers that the process of enrolling and getting a GMS for cattle is pretty easy.

“You don’t have to have an onsite audit,” he says. “You just need to send the birth dates, the registration numbers (for sires), and a description of the cow herd.”

There is no additional cost associated with the GMS program, aside from IMI Global’s Age and Source verification enrollment, which includes an EID tag. Plus, for cattle marketed on the USPB grid, a $1 per head premium is paid for each low-frequency EID tag that is read and assigned to a carcass ID number within each lot.

When available, feeders can lease USPB delivery rights to market cattle through USPB on the Kansas grid. Those interested should call USPB at 866-877-2525 or visit www.uspb.com for more information.

“As we see more and more acceptance of the scorecard as a valuable tool for describing cattle’s genetic merit in the marketplace, I know we’ll see this program progress,” Marshall summarizes. “There’s tremendous value in better understanding the genetics of cattle in our industry, and this has just added to the momentum we see for rewarding the good work producers are already doing.”

For questions about the GMS or AngusVerified℠, call 816-383-5100 , or contact AngusLink℠ via email at anguslink@angus.org . IMI Global can also be reached to help start an enrollment at 303-895-3002 , or producers can complete its contact form to get started at www.imiglobal.com/contact .

Will the Bull Market in Cattle Ever End?

Wed, 06 Aug 2025 17:37:51 GMT

The bull market continues in cattle with record cash prices fueling all-time highs in nearby live and feeder cattle futures again on Tuesday. The action is leaving the industry — especially producers — wondering if there is anything that can stop this incredible run?

Cash is King

Brad Kooima, of Kooima Kooima Varilek, calls this the bull market of his career. He says the key is cash trade leading the futures, with fed cash cattle hitting a new record again last week. The average steer price came in at $243.17, which was up $3.79 from the previous week.

“Cash is king with one packer in particular coming out there and paying higher money in areas of the cattle belt on Friday,” Kooima says.

The South traded mostly $235 to $236 live, with the volume in the North at mostly $245 live.

“Probably the high point of the whole deal came Friday in western Nebraska at $247. So again, there’s a wide range of markets — North is generally higher than the South — but new record highs here again and very impressive,” he explains.

Closeouts Also at Record Levels

The good news is profit margins per head for feedlots are also at record highs, according to Scott Varilek of Kooima Kooima Varilek.

“Near a $1,000 a head closeout profit, and you’re wanting to take that for sure in my opinion,” he says.

Profitability Throttles Back Expansion

And that profitability is leading to a lack of heifer retention and expansion, says Don Close, senior animal protein analyst for Terrain.

“Even with the reduction in cow slaughter that we have seen for the year, in my line of thinking, mathematically, we’re still liquidating,” he explains. “Now there’s plenty of anecdotal evidence of people retaining heifers. But I don’t think we’ve numerically reached a plateau yet to think we’re into net expansion.”

Brady Huck of Advance Trading agrees, but adds some of his clients are starting to think more seriously about rebuilding.

“There’s also some tax implications as ranchers are out there selling their steer calves at record prices,” he adds. “If they go sell their heifer calf crop as well, they get into a situation where they’ve got to pay taxes on all that income — and you know how they hate to do that.”

When Will the Market Top?

Market analysts have been hesitant to call a top in the futures because live cattle are trading at such a steep discount to the cash trade. Plus, technically the futures have hit contract highs several times and put in key reversals only to have that bearish technical pattern negated.

Kooima says markets often top when the news is the most bullish, and there has been plenty of fundamental news for the bulls to feed on.

Supplies are tight, with the historical low in the cattle herd fueling the record cash prices for both fed and feeder cattle.

However, the market has also been fueled by the closure of the Southern border to Mexican feeder cattle , and the big key has been strong consumer demand .

What Could Break the Market?

Kooima says one thing that could break the market is a slowdown in consumer demand, which so far hasn’t happened — even with record-high retail beef prices.

The other possibility is a break in the cash market as packers get tired of negative margins.

Tyson Foods reported beef processing margins were down 8.8% in Q2 for a loss of $494 million.

Processors have been cutting kills for several weeks to prop up boxed beef values and stem their losses, but those kill cuts are ramping up even more.

Kooima adds, “I think there’s going to be a lot of kill cuts this week, you know, excuses for cooler clean outs and repairs. I think you’re going to hear a lot of 32-hour weeks in some of these places.”

With the fund, or managed money traders, near record long in the market, the other fear is a black swan event that could cause them to liquidate.

At these price levels, that means increased volatility in the cattle market. So, market analysts agree risk management is more important than ever.

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Several Factors are Driving Strong Cull Cow Markets

Tue, 22 Jul 2025 10:33:41 GMT

Cattle markets have been impressive across the board in 2025, and cull cow markets have been no exception. The monthly average price for 80-85% average dress boning cows in Kentucky set a record in June and may set a new record in July.

June 2025 prices were 16% higher than June of 2024 and 62% higher than June of 2023. This is a trend across all regions of the U.S. as demand remains strong and cull cow supplies remain tight.

I want to briefly discuss some specific factors behind these prices levels:

The most obvious reason for the extremely high cull cow prices has been sharp reductions in slaughter levels. As I write this in late July, beef cow slaughter is down 17% year-to-date from 2024. If this trend continued through the end of 2025, it would represent a reduction in beef cow slaughter of more than 450,000 cows.

The beef cow herd was culled hard from 2021 to 2023, so it is likely that a lot of poor performers had already exited the herd. And of course, the current calf market is encouraging producers to hold on to cows a bit longer than usual. It is also worth pointing out that dairy cow slaughter is down 7% for the year, which is also contributing to the tight supplies.

Consumer demand has been strong and has probably been overshadowed a bit by discussion of tight supplies. Ground beef represents a significant share of beef consumption, and a large portion of cull cow slaughter is targeted for the ground beef market. It is also likely that high retail prices are pushing some consumers towards lower priced ground beef, as opposed to higher priced cuts. While supply is absolutely a major factor, strong demand has added fuel to the fire.

Finally, there is another element that has not gotten as much attention, but that I consider to be significant. Multiple dynamics have pushed cattle to higher slaughter weights over the last few years and that has led to a substantial increase in quality grades.

For some perspective, 10.6% of cattle graded Prime in 2024 and that percentage is running at about 11.8% thus far in 2025. This increase in marbling also means there is an increase in the amount of fat in the trim, which creates additional demand for lean trim to be used for blending. Since cull cows are a source of lean trim, this has also contributed to strong cull cow markets.

Next Step in the Supply Chain: Walmart Opens First Owned and Operated Case-Ready Beef Facility

Fri, 27 Jun 2025 20:29:14 GMT

A pivotal step in Walmart’s strategy to build an end-to-end supply chain for Angus beef , the company has opened its first-ever owned and operated case-ready beef facility.

“The opening of our new facility in Olathe, Kan., is centered on delivering more of what our customers want — affordable food and quality they can trust,” says John Laney, Walmart U.S. executive vice president, food. “This is the first case-ready facility fully owned and operated by Walmart, and that milestone ensures we’re able to bring more consistency, more transparency and more value to our customers.”

With more customers seeking greater transparency about where their food comes from, this investment demonstrates Walmart’s commitment to delivering traceable, high-quality products while strengthening supply chain resiliency and control.

In 2022, Walmart made an equity investment in Sustainable Beef LLC in North Platte, Neb., as part of its continued efforts in creating an end-to-end supply chain for Angus beef. Sustainable Beef’s majority ownership is local and producer-centric, with cattle sourced from no more than a 250-mile radius to the plant in a region that has exceptionally high-quality cattle.

The Sustainable Beef LLC plant processed its first cattle in late May. Once the plant if fully operational, it is expected to process 1,500 head of cattle per day.

Read More: From Seedstock to Meat Case, A Vision Becomes Reality for Nebraska Rancher

The Facility

The 300,000-plus-sq.-ft., state-of-the-art, case-ready facility will package and distribute Angus cuts sourced directly from Sustainable Beef LLC to stores across the Midwest, bringing even greater transparency to customers seeking quality beef options at Walmart stores in the region.

The facility will process fresh beef into case-ready cuts, packaged and ready for retail, which are then shipped directly to Walmart distribution centers to serve stores in the Midwest. The facility is also expected to generate increased business for suppliers and service providers, further amplifying the facility’s effect on the community.

“Kansas has long been at the forefront of the agriculture industry, and Walmart’s investment in Olathe is further driving our success,” says Kansas Governor Laura Kelly. “Through food production and supply chain innovations, we are proud to partner with Walmart to transform how we feed communities across our state and the region.”

The new facility will fulfill demand for quality beef in the region and is creating more than 600 Walmart jobs for Olathe and the surrounding community.

These efforts also support Walmart’s commitment to U.S. manufacturing and pledge to invest $350 billion in U.S.-made products by 2031. More than two-thirds of Walmart’s annual spend is on products made, grown or assembled in the U.S.

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Union Authorizes Strike at Tyson's Amarillo Beef Plant

Fri, 27 Jun 2025 18:50:59 GMT

Teamsters representing 3,100 slaughter and processing workers voted to authorize a strike demanding better wages and improved benefits at Tyson’s beef processing plant in Amarillo, Texas. Teamsters Local 577 members voted by a 98% margin to authorize a strike.

“We are bargaining with one of the most repulsively greedy and amoral corporations in the entire country. Last year, Tyson’s CEO made 525 times that of the median worker,” says Al Brito, Local 577 president. “This facility is essential to the beef supply chain, but if Tyson’s corporate leadership doesn’t start demonstrating some basic humanity, we will be forced to take action.”

The union has filed a number of unfair labor practice (ULP) charges against Tyson for violating labor law. In the past month, management has harassed union stewards, coerced injured employees into dropping claims, illegally interrogated union members, and falsely told workers at the facility that if they engaged in a ULP strike they would lose their jobs.

“We’re not just fighting for more money,” says Keisha Carey, a member of the Tyson teamsters negotiating committee. “We’re tired of seeing people suffer. We’re tired of seeing people hurting. We’re tired of seeing the elites who run this company have no compassion for the workers who make them rich. We’re ready to strike this company if they don’t give us the deal we deserve.”

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Time to Redefine Yield Prices: Today We’re Paying For Weight, Not Value

Thu, 19 Jun 2025 17:35:23 GMT

Optimization is key in beef production — finding the right balance of muscle, fat and efficiency without going to extremes.

“Right now, you’re getting paid on a yield number that is grossly inaccurate,” says Dale Woerner, Texas Tech University Cargill endowed professor. “Somebody’s getting screwed in this deal because we’re making cattle heavier, but we’re actually digressing in red meat yield because cattle are just getting fatter.”

Warner is the featured guest on the newest “ The Future of Beef Show ” podcast released this week.

According to Woerner, when it comes to yield and meat quality, the tools we use to measure — and reward — beef performance are decades out of date.

Tune into the podcast to hear these five key points discussed:

The current yield grade equation is grossly inaccurate and needs to be updated , with only 15%-20% accuracy in measuring red meat yield.

Woerner explains the primary concern is the current yield grade equation, which was developed in the 1960s, is inaccurate for modern cattle. The existing system doesn’t effectively measure red meat yield, primarily because rib-eye area explains only 3% of muscling variation in individual animals. This means producers are essentially being paid incorrectly for their cattle.

“Depending on how you calculate it, but specifically on an individual animal basis, current yield grade equations sitting around that 15[%]-20% accuracy level, so far below a passing grade,” Woerner says.
Cattle are becoming increasingly fat, which is inefficient and costly. This fact is driven by market signals that incentivize weight over muscle.

“As we incentivize weight, particularly in cattle that have been on feed for a long time, we’re largely incentivizing fat,” he explains.
Technology like 3D imaging and CT scans can help more accurately measure red meat yield, with potential to revolutionize how cattle are valued.

“With the CT technology, not only can we measure muscle, fat and bone, but we can actually virtually cut apart the carcass and trim it to two or three different levels,” Woerner explains. “CT scanning is just more user-friendly than MRI. Even though MRI gives us greater clarity in the data, we just don’t need that level of clarity for what we’re doing.”

Woerner predicts it will be three to five years before a new system can be developed and preform to satisfactory levels before broad implementation.
Genetic selection should focus on muscling and efficiency, not just ribeye area, with an emphasis on moderation and breed complementarity.
The beef industry needs to optimize cattle production by using data, technology and reproductive innovations to improve feed conversion and overall meat quality.

Woerner stresses the goal is to produce cattle that:

Have optimal muscling.
Convert feed efficiently.
Produce high-quality meat.
Are environmentally sustainable.

“Tenderness is an ante up in a poker game, and you have to have tenderness to be acceptable from a consumer standpoint. But once tenderness is acceptable, then it’s all about flavor,” he summarizes. “Beef’s stronghold in the market will always be flavor.”

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Investing in the Future: Cargill Announces $90-Million Investment in Automation and Technology

Fri, 06 Jun 2025 18:18:31 GMT

Cargill plans to invest nearly $90 million in automation and technology at its Fort Morgan, Colo., beef plant over the next several years as part of its broader Factory of the Future initiative aimed at improving operational efficiency, yield and worker safety, the company announced Thursday.

“We’re at an extremely challenging point in the cattle cycle for packers with tight supplies and margins,” says Jarrod Gillig, senior vice president of Cargill’s North American beef business. “But now is the time we need to step up and make investments in our facilities to make sure they are working efficiently.”

The company has already put $24 million into technology upgrades at the plant since 2021. One of the newest tools to be deployed will be CarVe, Cargill’s proprietary, patent-pending computer vision system that measures red meat yield in real time. The technology gives managers instant feedback to help workers refine cutting techniques and reduce waste.

“I grew up on a farm/ranch and am blessed to still be active in our family’s cattle operation today, so I understand the importance of honoring the whole animal and doing right by the hard work of the ranchers and farmers who raise them. With tools like our new CarVe computer vision technology, we’re able to keep more high-quality protein in the food system, cut down on food waste, and make each animal count. That matters more than ever today.”

— Jarrod Gillig, senior vice president of Cargill’s North American beef business

“Before CarVe, yield data was always yesterday’s news,” Gillig says. “Now, we’re making decisions in the moment and saving product that would’ve been lost.”

Even a 1% improvement in yields could save hundreds of millions of pounds of beef annually, a meaningful gain at a time when U.S. cattle supplies are at their lowest levels in years.

“With CarVe, we are not replacing employees, it is empowering them to work more efficiently and effectively and helping us maximize the carcass,” Gillig summarizes.

The company has also invested in the Fort Morgan community, backing a $40 million workforce housing initiative that includes new townhomes and an 81-unit apartment complex scheduled to open this fall. Cargill has provided more than $500,000 in grants to local nonprofits for childcare access and housing-related support.

“Fort Morgan plays an important part in Cargill’s critical role as a food company to the nation and the world,” Gillig adds. “By partnering with local ranchers and farmers in Colorado and the region, we’re working hard to produce more food with less impact there so we can move it to store shelves and ultimately family dinner tables across the country.”

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Hidden Hazards: Now is the Time to Rethink Gun Use in Cattle Handling

Tue, 13 May 2025 14:17:49 GMT

With the smallest cattle herd size on record, the impact of every pound of beef and every head lost due to foreign material contamination is even more significant today than it has ever been.

Pat Mies, Tyson Fresh Meats vice president food safety and quality assurance and beef industry food safety council chair, shares alarming math regarding foreign material contamination.

There is an economic loss due to cattle contaminated with foreign materials. Mies explains regulatory rules consider any foreign material, regardless of size, to be an adulterant and unfit for human consumption.

There’s more than 50 griding/further processing facilities across the U.S.

(NCBA)

The issue is industry-wide and not just state or region specific. Processors from across the U.S. have frequently reported challenges with foreign material in beef cattle.

“It’s not a Texas issue or New Mexico issue or a South Dakota issue,” Mies says. “It’s an entire U.S. issue.”

Trey Patterson, Padlock Ranch president and CEO, says “Food safety in our industry is non-negotiable; it’s now an expectation.”

(Schwartz, West Texas A&M)

Patterson says the 2022 National Beef Quality Audit revealed a significant problem: 100% of non-fed plants reported finding foreign objects in beef, with half experiencing customer complaints about items like shotgun pellets. And in the audit, 50% of fed plants are having the same issue.

Trent Schwartz, West Texas A&M University assistant professor, explains, “This is not a fed versus non-fed issue. This is all cattle being sold for meat consumption, and we believe highly that all of this is happening in the production phase, whether it be cattle gathering techniques or treating cattle.”

Mies acknowledges plants have access to resources and technology to catch foreign material but it is not 100% accurate.

“We have metal detectors, defect eliminators, X-ray systems and vision systems,” he admits. “We’re using artificial intelligence to train these systems to do a better job, to get rid of these foreign objects. And then we also have the human element — people watching product and pulling product that may have foreign objects in it. We have all these things in our plants, yet we still have problems. It’s not 100% foolproof. It’s not 100% fail-safe.”

Economic Impacts

Patrick Linnell, CattleFax analyst, provided an economic perspective regarding cull cows and the financial loss due to foreign material contamination.

“Cull cows is one area in particular where there’s an especially strong connection between animal welfare and husbandry and value to the producer,” Linnell says.

With cow inventory at its lowest since the 1950s, and as the beef and dairy industries try to stabilize and rebuild, Linnell says cull cow supplies will remain tight for the foreseeable future. Cull cows on average represent 20% of total marketing and management for an individual operation and the industry as a whole, he adds.

“The consumer wants all the beef through the system that we can provide them,” Linnell says. “That’s why making sure we don’t have to dispose of this high-value product because of foreign material contamination is important.”

The economic and reputational implications of foreign contamination are severe. With current beef prices, each contaminated animal represents a significant financial loss. Moreover, these incidents can damage domestic as well as international market confidence.

Linnell says that 50% of U.S. beef consumption is in the form of ground beef.

“If you do the simple math and look at what ground beef costs today in retail stores, it’s on average, about $5 per lb. across the U.S. That is a lot of money that we’re pulling out of the system because people decided to use a shotgun and bird shot to move stubborn cattle,” Mies says.

Starts With the Live Animal

Schwartz is the lead researcher working on a checkoff-funded study in partnership with NCBA regarding foreign material detection techniques in live animals before the animal enters the processing facility.

He says a wide range of foreign objects have been found in live animals, with metal shot being the most common. He points out that most of the foreign material found relates back to metal objects coming from the live side, not something that’s added to the product post-harvest.

His team is cataloging pictures and materials received from plants and individuals for future use and educational purposes. The primary source of these foreign objects appears to be cattle handling practices.

“Cattle get in rough country and won’t come out,” he says. “The first instinct is to use a shotgun or rat shot, and to move those cattle with some metal shot.”

Hunters are another concern for the shot residue.

“We don’t feel like this is a hunting issue,” he says. “This is direct contact, point-blank type issue. Criminal mischief has also been brought up. Criminal mischief or criminal acts is certainly a possibility.”

He also says unintended exposure or living conditions can lead to the foreign material such as cattle ingesting wire and it protrudes through the stomach and into the skirt or other organs.

Darts are also becoming an increasing concern, with some found deeply embedded in muscle tissue and even lungs.

“We need to start looking at the production side and how we can limit some of these items that are making their way into the plant,” Schwartz summarizes.

His ongoing research project is focusing on developing methods to detect objects in live animals under the hide using ultrasound, X-ray and metal detection techniques.

“The goal of the research is to determine efficacy. Does it work?” Schwartz explains. This work will allow for technology advancements to potentially identify foreign material throughout the supply chain in the live animal.

How You Can Help

Patterson suggests a voluntary, industry-wide effort to address the problem before it reaches processing facilities.

“I need your help,” Mies says in a plea to all beef producers. “I need you to talk to your friends, your family, your neighbors, anybody that you can about moving cattle with shotguns, and that it should never happen in our industry.”

To learn more about foreign materials found during beef processing watch this NCBA webinar:

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Breaking Ground: Livestock Producers Unite to Tackle Crucial Industry Issues

Mon, 05 May 2025 11:11:08 GMT

The U.S. livestock industry is diverse and unique — and for years it has been without a common voice or strategy. Industry leaders are working to change that through a common strategy that focuses on these facts:

Agriculture is not optional.
America’s food chain is only as strong as our family farms and ranches.
Our livestock industry is better together and must unify with one voice.

“We’re at a pivotal spot in our country right now,” says Eric Smith, a cattle producer from Reform, Ala. “We’re going to find that if we don’t have a resurgence of producers in this country in a better climate for profitability, then we’re going to have industry loss.”

Smith was one of the 40 industry leaders who was in Denver April 21-23 for the Common Ground Summit . He says the summit demonstrated the industry’s collective commitment to preserving America’s agricultural land for future generations while strengthening and expanding the livestock producers who rely on it to feed the world.

“We needed to get a room together of individuals who believe in the future of this business and have a real conversation about what the future of America’s livestock industry looks like,” says participant Jake Parnell, a livestock marketer from Sacramento, Calif. “I’ve never sat in a room with leaders and thinkers who were so thoughtful about why we were there. There was no self-interest, there was no self-promotion.”

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A cross section of 40 individuals with extensive expertise from all industries of the cattle industry came together at the Common Ground Summit April 23-25 at the Brown Palace Hotel in Denver. It was a time for deep discussions, thoughtful consideration — and remembering cattle producers agree on a lot more than they don’t.

Common Ground Summit

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Common Ground Summit

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Common Ground Summit

Key priorities
As a result from the summit, the attendees agreed on five key priorities on which to focus and to stand united with one common voice as a beef industry. As a call to fellow producers, the group released this statement and strategies:

As dedicated stakeholders in the livestock industry, we call upon our fellow livestock producers and all of agriculture to join us and stand united. The time has come to prove that our industry can and will align to drive meaningful and lasting change, safeguarding the future of America’s agricultural sector, rural communities and our nation’s food independence.

We need your help in giving America’s livestock industry a common voice. Join us as we seek to:

1. Achieve and maintain ag-friendly tax policy.

Extend the Tax Cuts and Jobs Act provisions that help agriculture beyond 2025, including:

Preservation of federal transfer tax lifetime exemption amounts, indexed for inflation
Retention of step-up in basis under § 1014
Return to 100% bonus depreciation under § 168
Continued expanded application of § 179
Maintenance of the § 199A qualified business income deduction
Increase the aggregate limit allowed under § 2032A to $30 million, indexed for inflation

2. Make risk management tools more effective.

Increase the Livestock Risk Protection subsidy level
Allow Livestock Risk Protection coverage to start the day price risk is assumed
Create or improve mechanisms for industry input and oversight of risk management tools that will make them more attractive to producers

3. Improve access to labor.

Remove the seasonality component from H-2 programs
Create an optimized and efficient process for workers in good standing to return to the same employer year after year
Redefine “agricultural employer” to expand its scope for purposes of H-2A programs to include more employers essential to agricultural production in the U.S.

4. Increase flexibility for livestock haulers.

Exempt livestock haulers from Hours-of-Service rules
Permanently exempt livestock haulers from the Electronic Logging Device mandate
Support the state and federal adoption of increased load capacity limits

5. Create support for young and emerging livestock producers.

Reform USDA programs to raise limits on guaranteed loan programs, streamline the lending process and expand eligibility criteria
Create tax credits or incentives for leasing or selling land to, and providing capital to, younger or emerging livestock producers, including elimination of capital gains, reduced financing costs and access to loans
Create front-loaded tax relief for buyers purchasing land for use in livestock production
Establish programs and educational programming to cultivate interest in young people to pursue careers in livestock production.

Smith says it was remarkable how attendees from different regions and associations unanimously agreed on the summit’s key points and how important the collaborative approach was to tackling the issues.

“It’s a unified voice,” Smith says about the final list of strategies. “As we discussed topics, we would find problems and analyze the problem, and then we would draft a solution.
“The solutions are not easy and the people at that summit won’t be able to carry the message alone. As we look forward, we’ve got to have government intervention and help to put this in place. We need other people in agriculture, regardless of their association affiliation, to find a common spot they agree on and as an industry we need to push forward. The time is now.”

Next Steps
“It’s our job as the original group to take that momentum and start to include and encapsulate the entire industry and make some things happen,” Parnell says. “Our ultimate goal is to create a groundswell movement that unites producers, addresses common challenges and secures a sustainable future for the livestock industry.”

Parnell shares these steps to help keep the momentum going:

Increase engagement and involvement and broaden the movement. He says the original group needs to encourage other producers to join the Common Ground Coalition recruiting others to become part of the grassroots movement. He adds that it is important to encourage participation across organizational boundaries and to fight for shared objectives beyond organizational politics.
Create a unified voice among all agriculture. Parnell says it is important the industry develops a consistent message across all agricultural sectors and rallies around common industry issues. He also stresses it is important to present a unanimous approach when addressing lawmakers.

“I’m so passionate about this, and I believe the meeting is just the beginning,” Parnell summarizes. “It’s the beginning of what I consider a groundswell of a grassroots effort to get producers understanding the challenges from coast to coast and border to border are the same. And although we are profitable today in the livestock industry, we know what’s coming. Now is the time to make impactful change with a common voice.”

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Connecting Cattle Producers and Beef Wholesalers Through Supply Chain Management

Wed, 23 Apr 2025 18:44:14 GMT

For producers or groups of producers wanting to sell directly into wholesale beef channels, three big issues have created challenges to the marketplace: scale, balancing the carcass and logistics.

“If you have a steakhouse that has to buy hundreds of ribeyes every single week, it’s probably pretty hard to find many producers who are going to be able to fulfill that procurement spec weekly,” says Farmshare CEO Henry Arrowood. “No. 2 is balancing of the carcass — you might find a restaurant that wants to buy all your primes, but what are you doing with the rest of that carcass? And No. 3 is the logistics — how do I actually get the animal to the processing facility, secure a slot, secure the cut order, then get that product out into the hands of the buyer? That is exactly what our platform does.”

Arrowood shared on a recent AgriTalk episode about how the system provides a way for wholesale buyers to connect with smaller producers who can offer local, differentiated and value-added products.

“If a set of producers match the parameters of what the bid of the buy side is looking for, we start to show them these opportunities that they can participate in,” Arrowood says. “We show them the price point at which the customer is looking to purchase. We show them the target product and volume that they’re looking for, and then we aggregate that supply into an order and route it to one of our processing facilities for manufacturing.”

Finding a market for the entire carcass has remained a challenge to the smaller, regional producers who want to sell meat. Until now.

“Big packers have become these efficiency machines where they’ve been able to create all these different market opportunities to balance the carcass and create, good returns across the entire animal. That doesn’t exist on a small scale,” Arrowood says. “It’s really hard for any given producer to go out and create similar opportunities for the entirety of their carcass. That is what we’re doing.”

By using artificial intelligence, Arrowood says the company creates pricing models and yield distribution models to price optimize the entire animal for the end producer. If one buyer claims the ribeyes, the system figures out additional buyers for the strips, tenderloins, ground beef, etc., he says.

“It’s our responsibility to create a diversified set of customers on the buy side that we can move this product to, school systems, hospitals, really good targets for us in terms of moving that ground product,” Arrowood explains. “There’s a lot of restaurant groups that are looking for a different product than they might be able to get through the institutional food service companies. So, that’s where we’re moving some of that prime product.”

The idea for Farmshare came to Arrowood when he experienced the challenges in the beef supply chain firsthand.

“During the pandemic, I left San Francisco and moved out to a cattle ranch in Montana, and that’s where I am right now. And it didn’t take me long, when I got to this seventh-generation cow-calf operation, to realize there were some pretty deep inefficiencies in the supply chain and that of every dollar that I or any other city slicker was spending on meat in the grocery store, only 14 cents was making its way back to a producer’s pocket.”

As a tech pro, Arrowood began imagining what could be done to create more streamlined distribution that would give fair financials back to the end producer and help independent processors.

“I think that technology serves a very unique and interesting opportunity to rethink the way in which meat travels throughout the value chain, and the money that ultimately gets back into the hands the people who do the work,” Arrowood says.

Farmshare works with processors in more than 25 states across the country and is ready to expand its reach.

“We like to think of ourselves as bringing modern tooling to the independent processor,” Arrowood says. “For maybe the first time, we’ve built a set of tools for the independent processor that help to increase efficiency and maximize the throughput of their plant and ultimately drive them towards doing greater capacity within their facility.”

By automating and streamlining several manual processes and complexities that exist for processors today, Arrowood says the system can mitigate the amount of phone calls, paper pushing and filing that an independent locker has to go through in order to successfully manage their business.

“Our customers are saving five to seven hours per day on all the administrative sort of burden and complexity of their business,” he says.

He says packers have a lot of efficiencies, technology and staff to help them future proof their businesses.

“What we’re doing is building that as a shared resource and shared set of infrastructures that we can then sort of co-op out into the ecosystem for the independent processor,” Arrowood says.

This management system creates opportunities for efficiency throughout the supply chain while keeping the marketing between the buyer and the seller. Within the Farmshare system, the animal does not change ownership to the processor and the restaurant connects directly with a group of independent processors.

“We’re facilitating the transaction between those two parties,” Arrowood says. “We’ve used this network of independent processors as the manufacturing layer to actually turn that animal into a consumable product.”

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What Ranchers Need to Know About Automation in Packing Plants

Thu, 24 Oct 2024 20:14:25 GMT

Ranchers put countless hours and immense effort into raising a high-quality protein source for consumers. Yet, they are only the beginning of the supply chain and what happens during the final stages of production and processing can impact the quality and quantity of beef available to consumers. This makes it important for cattlemen and women to know what challenges the end of the supply chain faces and how the product is processed before reaching the end consumer.

Brianna Buseman is a meat scientist working for Marble Technologies – a company that specializes in helping packing plants improve their processes through automation.

“Most people’s interactions with the agriculture industry are the cheeseburgers they buy or steak they grill at home,” Buseman says. “Meat science serves as an awesome way to connect more people with the agriculture industry.”

On the flip side, meat science also connects ranchers to consumer demands and perspectives which can impact future production practices as well as how meat is processed. Growing up on a family operation, Brianna sees both perspectives and is passionate about bridging the gaps between ranchers, meat science and consumers.

Automation in packing plants is most frequently trying to solve challenges related to manual labor, process efficiency, product quality and food safety. Marble Technologies mainly focuses on automating the packoff line in beef plants to reduce the need for manual labor.

“In an average plant there are around 15 to 20 people whose only job for the shift is to search for and move vacuum-sealed sub-primals from the conveyor to the box and then push that box down the line,” says Buseman.

To put this into perspective, employees who box clods in a 2,500-head-per-day facility handle 5,000 pieces per day at 18 to 25 pounds each. Over the course of a year, that is over 18 million pounds of beef. Implementing technology in this area of the plant reduces manual labor for employees and allows for more data collection on the product. Marble paired a hardware and software system to sort cuts and bring them directly to employees for boxing eliminating the need for employees to spend time searching for their cut. This is just one example of how automation is revolutionizing the meat industry, Buseman explains.

Automation in packing plants is a long game despite the rapid changes in technology we see across all industries.

“We didn’t go straight from listening to music on the radio to listening on Spotify,” Buseman says. “We had to go through every version of the mp3 player and iPod to get there. Likewise, we can’t go straight from manual labor to 100% automation and robotics in packing plants.”

The main challenge with automation in established packing plants is the variance in carcass size and shape. There could easily be a 400-pound difference between carcasses which changes the processing procedure.

It’s important to note these automations aren’t implemented to eliminate employees. They allow employees to move into less physically demanding roles and create a better work environment. Packing plants aren’t overstaffed during shifts, they are usually running short handed.

Outside of automation, the meat industry is researching how different packaging and processing impacts the end quality of a product as well as different methods of extending shelf life. It’s exciting to know that the final segments of the supply chain are putting in the effort just like ranchers to ensure product quality for consumers.

Learn more about Marble Technologies on their website. https://www.seemarble.com/

Link to Podcast: https://www.casualcattleconversations.com/casual-cattle-conversations-podcast-shownotes/marble-technologies

USDA Seeks to Limit Use of ‘Product of USA’ Label By Packers

Fri, 27 Sep 2024 01:26:06 GMT

The Agriculture Department on Monday issued a proposed new regulation restricting “Product of the USA” labels on meat, poultry and eggs to animals born and raised in the U.S. The proposal would effectively close a labeling loophole that allows products to use such a label for beef and pork that is simply repackaged in the U.S.

President Joe Biden called for a reassessment of the labeling regulations as part of a 2021 executive order on Promoting Competition in the American Economy, and a commitment made in the Administration’s Action Plan for a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain.

The White House says the increased clarity and transparency provided by this proposed change will prevent consumer confusion and help ensure that consumers understand where their food comes from.

“American consumers expect that when they buy a meat product at the grocery store, the claims they see on the label mean what they say,” said Agriculture Secretary Tom Vilsack. “These proposed changes are intended to provide consumers with accurate information to make informed purchasing decisions. Our action today affirms USDA’s commitment to ensuring accurate and truthful product labeling.”

The present labeling standard has been in effect since congress voted in December 2015 to repeal mandatory country-of-origin labeling laws for beef and pork. That action was forced by Canada and Mexico when the two countries challenged the COOL laws as a trade restriction before the World Trade Organization.

As part of its review, USDA commissioned a nationwide consumer survey . The survey revealed that the current “Product of USA” labeling claim is misleading to a majority of consumers surveyed, with a significant portion believing the claim means that the product was made from animals born, raised, slaughtered and processed in the United States.

Regarding the new proposal, Vilsack does not think it would run afoul of trade rules because the labels are voluntary, nor will it impose undue burdens on meatpackers.

“They don’t have to put the label on there,” Vilsack told Bloomberg. “But if they choose to put it on there, then they better be able establish that the animals were born, raised, slaughtered, processed in the US.”

About 12% of all meat, poultry and egg products sold in the US currently claim US origin on their labels, the agriculture department estimates.

U.S. Cattlemen’s Association president Justin Tupper said in a statement his group is “thrilled that the proposed rule finally closes this loophole by accurately defining what these voluntary origin claims mean. If it says, ‘Made in the USA,’ then it should be from cattle that have only known USA soil.”

However, the North American Meat Institute said the new regulations for meat products are again likely to result in trade retaliation from Canada and Mexico costing American consumers and businesses billions of dollars.

National Cattlemen’s Beef Association NCBA Executive Director of Government Affairs Kent Bacus released the following statement:

“There is no question that the current “Product of USA” label for beef is flawed, and it undercuts the ability of U.S. cattle producers to differentiate U.S. beef in the marketplace. For the past few years, NCBA’s grassroots-driven efforts have focused on addressing problems with the existing label, and we will continue working to find a voluntary, trade-compliant solution that promotes product differentiation and delivers profitable solutions and for U.S. cattle producers. Simply adding born, raised, and harvested requirements to an already broken label will fail to deliver additional value to cattle producers and it will undercut true voluntary, market-driven labels that benefit cattle producers. We cannot afford to replace one flawed government label with another flawed government label.”

A statement from R-CALF USA said the organization supports the proposed reforms to the “Product of USA” label, but “it stands firm that only Congress can create labeling reforms that will restore the entire truth to beef consumers and create the market reforms deserved for domestic cattle producers.”