STRONG beef demand at home and abroad is without doubt the top story of the year so far for the U.S. beef industry. Consumers have kept buying beef despite record high retail beef prices. This in turn has enabled cash live cattle prices to set new record highs for seven straight weeks. The averages the week before last was $226.97 per cwt live and $361.74 per cwt dressed. However, boxed beef cutout valued have likely peaked just as retailers begin to raise their everyday beef prices to reflect the cutouts’ sharp increase. The national weekly comprehensive cutout (cuts, grinds and trim) increased by $21.09 per cwt since the week ended April 18. Wholesale beef prices are likely start declining on or before Father’s Day on June 15, say analysts.
Last week’s holiday-shortened kill schedule meant the harvest might have been be challenged to exceed 505,000 head, says Andrew Gottschalk, HedgersEdge.com. Reduced weekly harvest levels will continue to limit beef offerings, allowing the beef cutout values to score additional price gains. But record high live cattle prices and the currently higher beef cutout values have yet to be fully reflected in current retail beef prices. As such, consumers should encounter ever higher retail beef prices entering the dog-days of summer, he says. Total harvest levels for next week should trend toward 555,000. Reduced production this week should allow for additional gains in the beef cutout values. That said, cattle and beef cutout values are walking on stilts. The current advance in the beef cutouts will wipe out retail margins at the most recently reported monthly average retail price. How will consumers react to these increases at a time when demand is suspect at best? The principal question going forward: Can and will consumers ultimately be priced out of the market for beef?
Cattle Prices Were Up 19%
As noted, the 5-area fed steer price the week before last averaged $226.97 per cwt live, up $0.52 per cwt from the prior week’s $226.45 per cwt, which was the previous record. The price was 19.4% higher than the price the same week last year. Dressed prices averaged a new record high of $361.74 per cwt, up $4.07 per cwt from the prior week’s $357.67 per cwt. The price was up 19.2% on the same week last year. Last Wednesday saw 3280 head in Kansas sell at $215-222 per cwt live. Thursday morning saw a light trade in Iowa at $230-233 per cwt live and in Kansas and Texas at $220-225.50 per cwt live. Trade in Nebraska had not developed.
Steer carcass weights in the latest reported week ended May 17 declined sharply from the prior week but heifer weights were 2 lbs higher. Both remained well above year ago levels. Steer weights averaged 938 lbs, down 7 lbs from the week before but up 17 lbs on the same week last year. Heifer weights averaged 867 lbs, up 2 lbs from the prior week and up 20 lbs on the same week last year. Overall weights averaged 871 lbs, down 2 lbs from the week before but up 20 lbs on the same week last year. This was the equivalent of adding 13,305 head to that week’s slaughter total of 566,109 head, says HedgersEdge.com.
Meanwhile, the week before saw a sharp increase in forward and export beef sales. But reports of holiday beef sales were mixed. The comprehensive cutout averaged $353.17 per cwt, up from $345.64 per cwt in the prior week. The Choice cutout averaged $351.24 per cwt, versus $344.91 per cwt the previous week. Spot market sales accounted for 26.7% of the total volume of 6858 loads, formula sales accounted for 54.0%, forward sales accounted for 19.3% and export sales accounted for 18.3%. Boxed beef cutout values meanwhile increased the first three days of last week. The Choice cutout increased by $4.54 per cwt to $366.09 per cwt. The Select cutout increased by $2.32 per cwt to $353.64 per cwt. The three-day volume was light at 279 loads of cuts.
COF TOTAL IS DOWN 1.5%
THE May 1 Cattle on Feed (COF) total of 11.376M head was down 1.5% from a year ago and was exactly as forecast by analysts The total was 178,000 head lower than a year ago. April marketings at 1.825M head gave the report a slightly positive tone. They were down 2.5% from a year ago but were 0.7% higher than forecast. April placements at 1.613M head were down 2.6% from a year ago.
Five states, Colorado (up 1%), Iowa (up 3%), Nebraska (up 2%), and Oklahoma (up 2%), had more cattle on feed than a year ago. Texas had the most cattle on feed with 2.590M head, with its total down 180,000 head from a year ago. Nebraska was second with 2.555M head, down 40,000 head, and Kansas was third with 2.290M head, down 10,000 head. Only Kansas (up 3%) and Oklahoma (up 2%) placed more cattle than last year. Only three states, California (up 2%) Nebraska (up 4%) and Oklahoma (up 2%), marketed more cattle in April than last year.
Regarding placement weights, the under 600 lb category saw 25,000 fewer cattle placed than last year (310,000 head). The 600-699 lb category saw 5000 more cattle placed (225,000 head). The 700-799 lb category saw 5000 more placed (370,000 head). The 800-899 lb category saw 8000 fewer placed (443,000 head). The 900-999 lb category saw 10,000 fewer cattle placed (195,000 head) and the 1000 lbs plus category saw the same number placed (50,000 head).
The number of cattle on feed 150 days or longer peaked in April and now projects to trend lower going forward, says Andrew Gottschalk, HedgersEdge.com. The decline from June 1 to December 1 is estimated at 747,000 head. The decline last year was only 398,000 head. The projected decline this year compares to the previous five-year average posting a decline of 554,000 head. However, recognize that this drop is somewhat warranted, he says, as the beginning totals in this category of cattle on June 1 was 184,000 head above the prior year and 197,000 head above the previous five-year average. Given this, the front-end supply within this category of cattle should remain at a higher level than in the prior year through October. This projection is of course contingent on marketing estimates being achieved, he says.
Carcass weights should attain their seasonal low during June and then trend higher into mid-November, says Gottschalk. During the previous five years, monthly average steer and heifer carcass weights advanced 45 lbs and 32 lbs, respectively, from their seasonal lows into the end of the year. It is unlikely that the advance in carcass weights this year will be less than the seasonal trend, he says.
Outside Supply Is Higher
The feeder cattle and calf supply outside feedyards on May 1 was estimated to be 151,000 head above year ago levels, says Gottschalk. As a reminder, the projected increase in this supply is due to reduced placements, not necessarily to herd expansion. That said, modest heifer retention is likely beginning and may partially be the cause of the decline in heifer slaughter during the January-April period, a drop of 121,000 head. The scramble for feedlot placements will only intensify as heifer retention increases, he says. Given this situation, his forecast for feeder cattle and calf prices has been revised upward. His annual average price estimate for 750-800 lb feeder steers is $287 per cwt. The price of 500-550 lb steer calves is expected to average $373 per cwt. This would represent annual average gains approximating 14% and 18%, respectively, he says.
Slowing weekly harvest levels has continued to result in record high average carcass weights on a weekly basis throughout this time period, says Gottschalk. Through the week ending May 24, beef production was down only 2.6%, reflective of the record weights. The carcass weight disparity is expected to continue at least through the third quarter. Producers continue to add weight, responding to economic signals that are at their best levels historically. The cost of gain remains at a level below the selling price of fed cattle that is at the widest gap ever seen. His annual beef production estimate for this year is 26.1 billion lbs, down approximately 900M lbs from the production level seen last year, which saw a 3.3% drop.
UFCW AND JBS RATIFY HISTORIC CONTRACT
JBS USA Beef and the United Food and Commercial Workers International Union (UFCW) ratify a national labor contract that includes benefits for 26,000 workers at 14 of the company’s U.S.-based processing plants. In what is being referred to as an historic agreement, the contract provisions include wage increases, new paid sick leave benefits, additional vacation time and a new pension-based retirement program, as well as other contract upgrades. The contract provisions include significant worker safety measures and programs designed to ensure JBS workers are protected physically in the workplace and are financially secure in the future, said Mark Lauritsen, UFCW’s international vice president.
UFCW applauds its members for ratifying this historic contract, said Lauritsen. Through the collaboration of its local bargaining committees and the commitment of JBS to providing industry-leading benefits and protections, after nearly 40 years JBS workers will have a pension retirement plan, giving them a path to a secure financial future. Every employer in the meatpacking industry should follow JBS’s leadership and reintroduce pension plans for the hard-working men and women who keep America fed, he said.
Workers like Ivan Luna Guerrero, a mechanic at JBS’s fed beef plant in Grand Island, Neb., said the new agreement is another step toward normalizing fundamental benefits for meat industry workers that have historically not been available. For the first time, JBS will have a paid sick time program that workers can use to take care of themselves and their families while keeping them healthy and safe on the job. For too long, the meatpacking industry offered zero paid sick time for its workers. Now it’s become the standard thanks to the solidarity of UFCW members and their ability to stand together and achieve better working conditions for all of them, she said.
Other features of the contract include: A designated walking steward will be present during all shifts at each facility to enforce contract provisions, including safety measures, such as line speed, to protect workers on the job; Significant wage increases for unionized workers, including retroactive pay and a ratification bonus; Establishing a National Joint Labor Management Committee to improve communications and review the impact of new technologies before they are introduced in the workplace.
Shareholders Approve Dual Listing
Meanwhile, minority shareholders of JBS S.A. vote to approve the company’s dual listing of shares on the New York Stock Exchange (NYSE) and the São Paulo Stock Exchange during a general shareholders’ meeting held May 23. The two largest shareholders of JBS S.A., J&F Investimentos and BNDESPar, reached an agreement to abstain from voting at the meeting. Shares could be listed on the NYSE as early as this month.
JBS believes this transaction will increase its visibility in global markets, attract new investors and further strengthen its position as a global food industry leader, Gilberto Tomazoni, JBS’s Global CEO, said in April after the company announced the completion of the Securities and Exchange Commission (SEC) registration process. Earlier last month, JBS reported its strongest first quarter earnings performance in company history. JBS net sales increased 8.5%, while net profit jumped 50.5%, with an EBITDA margin of 7.8%, for the period ended March 31, 2025.
JBS has been working to list company shares in the U.S. for several years, says Meat+Poultry. But the company’s move has been met with backlash from environmental groups and members of Congress due to allegations of corruption, anti-competitive business practices and negative environmental impacts. Most recently, Senator Elizabeth Warren (D-Mass.) wrote to key executives at JBS USA and its subsidiary Pilgrim’s Pride, seeking an explanation of a $5M donation given to the Trump-Vance Inaugural Committee ahead of approval of the company’s proposed dual listing. “I am concerned Pilgrim’s Pride may have made its contribution to the inaugural fund to curry favor with the Trump administration,” Warren wrote to Fabio Sandri, CEO of Pilgrim’s, and to Wesley Batista Filho, CEO of JBS USA, on May 19. She noted ongoing federal investigations into JBS said JBS could benefit from “favorable treatment from the current administration.”
USMEF OUTLINES INNOVATIONS
THE U.S. Meat Export Federation (USMEF) is introducing new innovations in its major market areas as a way of overcoming trade challenges. Senior international staff gave examples of innovative efforts at USMEF’s Spring Conference in Fort Worth, Texas. Jihae Yang, USMEF vice president for the Asia Pacific, noted that with high tariffs and other barriers severely limiting pork and beef exports to China, the organization has intensified campaigns aimed at moving items traditionally popular in China to alternative markets. For example, USMEF partnered with a major retailer in South Korea for a promotion of U.S. beef short plates, after uncertainty over plant eligibility and higher tariffs made the product more difficult to move in China.
Yang added that if the trade impasse with China persists, she foresees more U.S. short plates being available to importers and distributors in Southeast Asia. Yang also updated members on how USMEF is working with a Korean meal kit manufacturer and a Japanese distributor to develop and promote items featuring U.S. pork bung. U.S. pork tongue trimmings are also being promoted in popular dishes in Japan’s casual dining sector.
Gerardo Rodriguez, USMEF director for Mexico, Central America and the Dominican Republic, explained that while Mexico has developed into the largest destination for U.S. red meat, the U.S. industry now faces unprecedented levels of competition in the Mexican market. He noted that it is more important than ever to differentiate U.S. red meat from other suppliers’ products and educate consumers about its unique attributes.
Right now, a major focus for USMEF is to establish loyalty in the next generation of consumers, developing several programs for the future customer, said Rodriguez. With Mexico being a trading partner for so long, it can be easy to think of it as a mature market. But there are always new markets within the market that USMEF can expand and new tactics it can employ. Its mobile grill academy is a good example, where USMEF highlights the unique attributes of U.S. red meat all across the country, he said.
USMEF Latin America Representative Homero Recio highlighted the U.S. industry’s efforts to overcome Colombia’s restrictions on U.S. beef. These were imposed for much of last year due to findings of highly pathogenic avian influenza in U.S. dairy cows. The ban, which eventually extended to beef from 14 states, was lifted in September 2024. But the impact has persisted, in part because it created a new opportunity in the Colombian market for Canadian beef. While reclaiming this business has not been easy, it has resulted in heightened efforts to establish customer loyalty to U.S. red meat, he said.
MARFRIG AND BRF WILL MERGE
TWO of Brazil’s largest meat companies will merge. Marfrig Global Foods S.A. recently announced its plans to merge with BRF S.A. The two sides proposed in public disclosures that the new business, if approved, will be called MBRF Global Foods Company S.A. According to their fact sheet, the combined business will increase revenue and reduce costs estimated at 485M reais ($85.6M) per year. The companies expect to generate 320M reais ($56.5M) in expense reductions from synergies within the new business, including the unification of commercial and logistics operations, consolidation of operating systems and optimization of the corporate structure. Total impact on EBITDA would be 805M reais annually. During the past 12 months, Marfrig and BRF listed their net sales at 152 billion reais ($26.8 billion).
In the deal, BRF shareholders would receive 0.8521 common shares of Marfrig for each common share of BRF on the transaction’s closing date. BRF would also become a wholly owned subsidiary of Marfrig. A presentation released by both companies showed Marfrig’s controlling shareholder would have a 41.5% stake in the new business. Saudi Agricultural and Livestock Investment Co., a current shareholder in BRF, would receive a 10.6% stake with the merger. Marfrig in 2018 acquired National Beef Packing Co., Kansas City, Mo.