THE U.S. beef industry enters its two weakest demand months of the year. So all eyes will be on how consumers respond to record high prices in the retail meat case. The December All Beef price averaged a record $9.55 per lb, up 15 cents from November’s $9.48 per lb and up 18.2% from December 2024. The December Choice beef price averaged $10.08 per lb, the same as in November but up 20.3% from December 2024. These price levels suggest that a lot of consumers in the next two months will find that many beef items are out of reach price-wise and will turn to much cheaper pork and poultry, whose prices in December were lower than a year earlier.
Exacerbating the price impact is the fact that consumer confidence in the economy plummeted in January. The Conference Board’s Consumer Confidence Index fell by 9.7 points to 84.5 from an upwardly revised 94.2 in December. A 5.1-point upward revision to December’s reading of the Index resulted in a slight increase last month, reversing the initially reported decline. However, January’s preliminary results showed confidence resumed declining after a one-month uptick, says the board. Confidence collapsed in January as consumer concerns about both the present situation and expectations for the future deepened, said Dana Peterson, the board’s chief economist. All five components of the Index deteriorated, driving the overall Index to its lowest level since May 2014 (82.2), surpassing its COVID-19 pandemic depths, he said.
Consumer Incomes Will Be Key
Consumer incomes will be key to maintaining or improving beef demand going forward, says Bob Wilson, HedgersEdge.com. The pace of inflation held steady in December from the previous month at an annual rate of 2.7%, well off the 2022 peak of over 9%. But on a line item basis, groceries and meals away from home showed some of the largest increases during December as consumers embraced the holidays. Incomes also rely upon jobs. When tallying jobs for the year, 2025 had the lowest pace for average monthly job growth since 2003, excluding the two recessionary periods since the turn of the century, he says.
This split screen view will keep consumers edgy and cautious with their money, says Wilson. The upcoming payments for Christmas bills and the spike that is coming for heating bills following the most recent arctic storm will place further constraints on discretionary spending. February can be a quiet time at the retail beef counter, he says.
Boxed beef cutout values meanwhile continue to respond to the reduced beef production, although their advance has failed to put much of a dent in packers’ deeply negative margins. They were negative by $163.87 per head the week before last, according to HedgersEdge.com. This meant they were negative by an average $216.70 per head in the four weeks including the week ended January 3. The comprehensive cutout the week ended January 23 averaged $364.45 per cwt, versus $360.93 per cwt the prior week. The Choice cutout averaged $361.28 per cwt, versus $355.04 per cwt, while the Select cutout averaged $357.27 per cwt, versus $352.78 per cwt. Formula-priced sales accounted for 51.1% of the total volume of 7184 loads and spot market sales accounted for 26.8%. Of note was that forward sales accounted for 22.1% and export sales accounted for 19.1%. The Choice cutout the first four days of last week declined by $1.26 per cwt to $367.66 per cwt, while the Select cutout declined by $1.67 per cwt to $360.72 per cwt.
FED CATTLE PRICES ADVANCE AGAIN
CASH fed cattle prices continue to advance despite the negative packer margins noted in the previous story. Cattle feeders have a firm hold on their inventories and all the market signals are that they are in no rush to sell cattle even if they are record heavy. Cash live cattle prices the week before last averaged $234.70 per cwt live, up $2.20 per cwt from the prior week. Dressed prices averaged $368.80 per cwt, up $4.16 per cwt from the prior week. Most sales occurred on the Friday. Very little cash trade occurred the first four days of last week. The only trade of note was on Monday when 224 head sold in Iowa-Minnesota at $234 per cwt live or $368 per cwt dressed. These prices likely set the tone for trade last Friday. Fed cattle meanwhile set another new grading record. They graded 14.26% Prime and 73.04% Choice for a combined record of 87.30% the week ended January 17. This beat the previous record of 87.21% set the week ended January 3.
Packers and cattle feeders early last week had to deal with the most severe storm of the winter. The logistics on Monday of shipping and travel were approaching nightmare status in figuring out who needed what, how to get raw materials and labor to plants, as well as moving processed production to end users, says Bob Wilson, HedgersEdge.com. The kill last Monday was an estimated 100,000 head, with cow and bull slaughter only 12,000 head of the total. To add to the weather disruptions, there was a fire Monday at Preferred Beef Group’s Booker, Texas beef plant. Reports thankfully reported no injuries but the physical structure looks to have significant damage and operations are suspended., says Wilson. The plant has a maximum daily slaughter capacity of 725 head and harvests mostly non-fed cattle.
SALINE FARMS UPDATES ITS PLANS
A PROPOSED new beef processing plant in Creal Springs, Ill., provides a new update on its USDA-inspected beef processing initiative. Saline River Farms says it is refining its development strategy to advance the project as a fully vertically-integrated operation rather than a single-facility build. It now intends to coordinate cattle sourcing, processing and logistics rather than rely on what it calls fragmented third-party components. The approach is designed to improve supply certainty, operational efficiency, traceability and long-term sustainability in the changing beef market, it says.
This phase of work is essential to ensuring the project is constructed and operated in a manner consistent with regulatory standards, market realities and long-term operating needs, said Saline River Farms in a release on Facebook. Large-scale agricultural and processing developments involve multiple interdependent stages and careful sequencing at this point is critical to long-term success. In the next phase of the project, Saline River will focus on detailed engineering and facility design, environmental reviews and regulatory coordination, engagement with processing, logistics and technology partners and alignment with applicable state and federal program requirements, it says. The company says it will provide additional updates as engineering, construction and operational milestones are achieved. The company broke ground in August 2023 on a 60,000-square-foot meat processing facility in Creal Springs. At the time, Saline River Farms said it expected to operate under federal inspection and have the capacity to process up to 1600 head per day, bringing 400 new jobs to Williamson County, Ill.
RANCHERS BUILD A VIRTUAL FENCE
AMERICAN ranchers are building a new kind of fence, one that exists only as GPS coordinates. In the past year, they’ve created more than 11,000 miles of virtual fencing, roughly equal to the perimeter of the continental U.S., using smart cattle collars provided by a New Zealand ag-tech company called Halter. Its collars let ranchers draw and move fences from a smartphone app, guide herds with sound and vibration cues and track animal behavior in real time. The result is fewer hours on repairs, better pasture utilization and improved flexibility for short-staffed operations. The economics are compelling, says Halter. With installation and maintenance of conventional fencing averaging around $20,000 per mile, the shift to virtual fencing represents approximately $220M in avoided costs for Halter’s U.S. customers, it says.
LATEST COF REPORT SHOWS DICHOTOMY
THE January 1 Cattle on Feed (COF) total was the lowest January 1 total since 2017. But that did little to reduce the number of cattle on feed 150 days or more. The COF total of 11.450M head, which was 96.8% of a year ago and exactly as forecast by analysts. Marketings in December totaled 1.773M head, 101.8% of a year ago. But December had one extra slaughter day than last year, so the marketing percentage was 97.3% of a year ago. December placements totaled 1.554M head, 94.6% of a year earlier This was the second lowest total for any month since the low mark was set as the COVID-19 pandemic commenced in the spring of 2020. The COF inventory included 7.015M steers and steer calves, down 3.2% from the previous year. This group accounted for 61.7% of the total inventory. Heifers and heifer calves accounted for 4.435M head, down 3.1 from 2025.
Five states, Idaho up 5%, Iowa up 5%, Kansas up 1%, Nebraska up 2%, South Dakota up 2% and Washington up 6%, had more cattle on feed than a year ago. Nebraska had the most cattle on feed with 2.620M head, with its total up 40,000 head from a year ago. Texas was second with 2.530M head, down 250,000 head, and Kansas was third with 2.390M head, down 10,000 head. Only Texas placed more cattle in December (up 10%) than a year ago. Four states marketed more cattle in December than last year. California marketed 14% more, Oklahoma marketed 5% more, South Dakota marketed 19% more and Washington marketed 31% more.
Regarding placement weights, all categories but one saw year-on-year declines. The under 600 lb category saw 30,000 fewer cattle placed than last year (365,000 head). The 600-699 lb category saw 20,000 fewer cattle placed (360,000 head). The 700-799 lb category saw 20,000 fewer cattle placed (355,000 head). The 800-899 lb category saw 13,000 fewer cattle placed (274,000 head). The 900-999 lb category saw the same number of cattle placed (115,000 head) and the 1000 lbs plus category saw 5000 fewer cattle placed (85,000 head).
Cattle on Feed 150 days or more on February 1 will likely be up 19% year-on-year, says Bob Wilson, HedgersEdge.com. These supplies may remain above the prior year levels through most of the first half of the year. Currently, the projection for April is that cattle on feed 150 plus days will be record large for any month in any year, although accelerated marketings could alter this level. The reduction in placements for the last half of 2025 was 951,000 head compared to the last half of 2024. But the net effect of these reduced levels has been offset to a large degree by marketings for the same time period dropping by 741,000 head. Projecting marketing rates at reduced levels, the June 1 COF total 150 plus days looks to drop slightly below the level of the previous year. This would be the first time the current year is under the previous year for these cattle since last February. The totals for these cattle remain above the five-year average by double digits, he says.
The central question for feeder cattle and calf prices is whether the cyclical high has been achieved, says Wilson. It is difficult to see. The first assault on the all-time high prices set in the fourth quarter of 2025 corresponded to the increase in placements for the first half of January, with prices thus far falling just short of their highs. Another surge could be supported by a positive Annual Cattle Inventory report, scheduled for release by USDA on January 30, or by a move to higher prices in the fed cattle markets, he says.
BIANNUAL CATTLE INVENTORY REPORT
THIS Friday’s annual Cattle Inventory report is expected to show that all cattle and calves in the U.S. on January 1 was about 86.585M head down only 0.1% on a year earlier. These and other pre-report estimates come from Tyler Cozzens of the Livestock Marketing Information Center. His other estimates include: Cows and heifers that have calved, 37.55M head, up 0.9%; Beef cows at 27.980M head, up 0.4%; Milk cows at 9.570M head, up 2.4%; All heifers 500 lbs and over at 18.190M head, up 0.1%; Beef replacement heifers at 4.760M head, up 1.9%; Milk replacement heifers at 3.93M head, up 0.4%; Other heifers at 9.500M head down 1.0%.; Steers 500 lbs and over on January 1 totaled 15.500M head, down 1.9% from January 1, 2025; Bulls 500 lbs and over totaled 2.015M head, up 0.3%; Heifers, steers and bulls under 500 lbs totaled 13.330M head, down 1.0%; The 2025 calf crop was an estimated 33.600M head, up 0.2% from last year. The most keenly watched category will be beef cow heifer replacements and beef cows.
MEXICO SETS IMPORT QUOTAS
MEXICO’S Ministry of Economy (SE) publishes a series of decrees establishing import quotas for beef, pork and rice to secure domestic supply throughout 2026. The federal government aims to balance the internal market, diversify supply sources beyond traditional partners, and ensure price stability for consumers by supplementing national production deficits with over 320,000 metric tons (mt) of combined duty-free imports, it says. In a decree published in the Federation Official Gazette, SE established a 70,000 import quota for fresh, chilled and frozen beef to ensure market stability and protect consumer purchasing power. This quota, valid until December 31, 2026, applies to specific tariff items, including carcasses, boneless beef and others covering both bone-in and boneless cuts.
SE notes that between 2020 and 2024, domestic beef production satisfied an average of 92.9% of apparent national consumption, with imports accounting for 7.1%. But in 2024, import volumes surged by 37.6% compared to the previous year, raising the import dependency coefficient to 9.2%. This upward trend continued through 2025, with import dependency reaching 11.8%. While the U.S., Nicaragua and Canada remain key trading partners, Brazil emerged as the principal supplier of beef to Mexico in 2025. The government determined that the 70,000 mt quota, equivalent to the annual average of Brazilian imports in 2024 and estimated 2025 figures, is necessary to diversify external supply sources without disrupting local production. These import rights will be assigned via a public bidding process under the Minimum Price modality, it says.
SE also established a 51,000 mt import quota for fresh, chilled and frozen pork, valid until December 31, 2026. This quota matches the volume of the previous allocation and applies to tariff items such as carcasses, hams/shoulders and other cuts. The rationale for the renewal centers on a persistent domestic production deficit. Government data indicates that between 2020 and 2024, imports covered 43.2% of apparent national consumption, with domestic production satisfying the remaining 56.8%. Pork is the second most consumed animal protein in Mexico, trailing only chicken. The decree also highlights a high concentration of suppliers. Over the last four years, the U.S. and Canada jointly accounted for more than 80% of pork imports. The 51,000 mt quota is intended to diversify supply sources and encourage competition without harming national swine producers, says SE. SE also established an import quota of 200,000 mt for paddy rice (un-milled rice), to be applicable throughout 2026.
14% OF HOUSEHOLDS WERE FOOD INSECURE
IN 2024, 86.3% of U.S. households were food secure. The remaining 13.7% (18.3M households) were food insecure. That’s according to USDA’s Economic Research Service (ERS). Food insecure households (those with low and very low food security) had difficulty at some time during the year providing enough food for all their members because of a lack of resources. The 2024 prevalence of food insecurity was not statistically significantly different from the 13.5% in 2023 and the 12.8% in 2022. In 2024, 5.4% of households had very low food security, statistically similar to the 5.1% in both 2023 and 2022. In this more severe range of food insecurity, the food intake of some household members was reduced and normal eating patterns were disrupted at times during the year because of limited resources, says ERS.
Children were food insecure at times during 2024 in 9.1% of U.S. households with children (3.3M households), statistically similar to the 8.9% in 2023 and 8.8% in 2022, says ERS. These households with food insecurity among children were unable at times to provide adequate, nutritious food for their children. Children are usually shielded from the conditions that characterize very low food security. But in 2024, children experienced instances of very low food security in 0.9% of households with children. These 318,000 households with very low food security among children reported that at times in 2024, children were hungry, skipped a meal or did not eat for a whole day because there was not enough money for food, says ERS.