CASH live cattle remain at a remarkably high level and close to their record of $238.91 per cwt set the week ended June 15. The 5-area steer prices for the week ended July 20 averaged $237.78 per cwt live and $379.36 per cwt dressed. These were up $0.57 per cwt and $0.15 per cwt dressed, respectively, from the prior week. They came despite the fact that steer and heifer slaughter that week was only an estimated 447,000 head. Packers had reduced their steer and heifer slaughter in response to plunging boxed beef cutout values. But the reduced slaughter had no impact on live cattle prices as cattle feeders are selling only the cattle they need to. The cash live cattle trade was typically slow to develop last week. Monday saw a smattering of sales in Nebraska at $246.85 per cwt live (above 80% Choice cattle) and in Kansas at $230 per cwt live. While the head count was tiny, it revealed one of the widest ever price spreads between northern and southern prices. The reported volume through Wednesday was 3110 head.
Market analysts remain surprised as to how cattle prices are holding up. Prices continue to defy gravity, says Andrew Gottschalk, HedgersEdge.com. Other than an occasional short-term pause, prices have continued to advance. Record wide profitability for the cattle sectors of the industry is setting the stage for herd expansion. This is also being encouraged by good to excellent grazing conditions in most regions, as well as the aging factors of the cow herd. Per the most recent drought monitor, only 15% of the cattle inventory is in an area classified as a region posting drought conditions, he says.
Record Historical Factors Are At Play
Reduced weekly harvest levels continue to be bolstered by a combination of record-making historical factors, says Gottschalk. First and foremost, the cost of gain exceeds the selling price of all categories of cattle, whether they be in the feedyard, in cow-calf inventories or as stockers. In turn, this has produced record profits. How long can these be sustained? The answer relies on how long Mother Nature cooperates and how long consumers are willing to pay up for beef. On both accounts, conditions have been very favorable to date, truly a blessing. Positive beef demand has been the major driving force behind higher prices. More recently, reduced beef production is increasingly becoming the dominant force behind higher prices, he says.
To this point, the supply side of the equation can be altered very little during the next 18 months, says Gottschalk. Herd expansion will further restrict supplies, which is normally price positive in the near term. This leads to the conclusion that maintaining positive beef demand will determine the ultimate price level during this upcoming and developing expansion cycle, he says.
A reduction in feedlot placements by 383,000 head through the first half of the year serves to limit the reduction in feeder cattle and calf supplies outside feedyards versus the prior year, says Gottschalk. Also during the first six months of the year, the industry saw increased heifer retention, holding them back for breeding purposes. The total heifer harvest during the January-June period was down 215,000 head versus the same period in 2024. For the year, heifer harvest is estimated to decline by approximately 475,000 head. Cow harvest is projected to decline by 766,000 head, meaning a drop in the total female harvest approaching 1.24M head this year. The combination of increased heifer retention and overall decreased placements through the first half of this year could be enough to show an increase year-on-year in feeder cattle supplies outside feedyards on July 1, he says.
HEIFER RETENTION REMAINS LIMITED
HEIFER retention in the U.S. beef herd remains limited, as numbers in USDA’s monthly Cattle on Feed report and biannual Cattle Inventory report revealed. The COF report for July 1 showed that heifers as a percentage of total feedlot inventories stood at 38.1%, up from the April 1 level of 37.6%. The inventory report showed that all heifers 500 lbs and over on July 1, 2025 totaled 14.6M head, 2% below the 14.9M head on July 1, 2023. Both numbers signaled that herd rebuilding is not yet occurring in any significant way.
Analysts say herd rebuilding may be starting slowly but ongoing high cattle prices continue to incentivize liquidation over retention. With the number of heifers in feedlots remaining mostly stable relative to that for steers, analysts say the reports indicate that while close to occurring, heifer retention is not yet underway to a significant level. Derrell Peel of Oklahoma State University says his feeling is that some movement towards herd rebuilding may be starting but is very slow and cautious. It is possible, perhaps even likely, that the January 2025 beef cow herd will be the cyclical low. But the January 2026 inventory will likely be close to unchanged, showing very little if any growth this year, he says.
While there are historically low total herd numbers, record cattle prices and improved pasture conditions have driven speculation that ranchers will soon move to rebuild their herds. But as CBW has reported, high cattle values are also contributing to the ongoing herd liquidation as ranchers opt to take advantage of strong markets and sell breeding cattle rather than hold them.
USDA biannual cattle inventory report was the first such report since 2023. The totals and year-on-year percentage for all categories were: All cattle and calves in the U.S. on July 1, 2025 totaled 94.200M head, 1.3% below the 95.400M head on July 1, 2023. The 2023 total cattle inventory was revised down 500,000. This year’s total was the lowest on record. Other numbers included: All cows and heifers that have calved totaled 38.100M head, 0.8% below the 38.4M head on July 1, 2023. Beef cows at 28.650M head were down 1.2% from two years ago. Milk cows at 9.45M head, were up 0.5% from 2023. Beef replacement heifers at 3.70M head were down 3% from two years earlier. Milk replacement heifers at 3.50M head were unchanged from 2023. Other heifers at 7.40M head were 3% below two years ago.
Steers 500 lbs and over on July 1, 2025 totaled 13.8M head, down 1% from July 1, 2023. Bulls 500 lbs and over on July 1, 2025 totaled 1.90M head, unchanged from two years earlier. Calves under 500 lbs on July 1, 2025 totaled 25.8M head, down 2% from 2023. Cattle and calves on feed for the slaughter market for all feedlots totaled 13.0M head on July 1, 2025, down 1% from two years earlier. Cattle on feed in feedlots with capacity of 1000 or more head accounted for 85.6% of the total cattle on feed on July 1, 2025, down slightly from two years ago. The total of calves under 500 lbs and other heifers and steers over 500 lbs outside feedlots at 34.0M head was down 2% from the 34.7M head on July 1, 2023. The 2025 calf crop is expected to be 33.1M head, down 1% from last year. Calves born during the first half of 2025 were estimated at 24.3M head, down 1% from the first half of 2024. An additional 8.80M calves are expected to be born during the second half of 2025.
July 1 COF was Lowest Since 2017
The July 1 COF total at 11.124M head was 98.4% of a year ago and the lowest total for the date since 2017. It was 180,000 head lower than a year ago. June feedlot placements at 1.441M head were 92.1% of last year and were 5.9% lower than analysts’ average forecast. June marketings at 1.707M head were 95.6% of last year and were 91.1% of a year ago after taking one extra slaughter day this year into account.
Four states, Iowa up 6%, Kansas up 2%, Nebraska up 2% and Washington up 6%, had more cattle on feed than a year ago. Texas had the most cattle on feed with 2.570M head, with its total down 220,000 head from a year ago. Nebraska was second with 2.440M head, up 54,000 head, and Kansas was third with 2.270M head, up 50,000 head. Only Iowa (up 21%) and Kansas (up 14%) placed more cattle than last year. No states marketed more cattle in June than last year.
Placements Weights Saw Declines
Regarding placement weights, all categories except the two heaviest saw year-on-year declines. The under 600 lb category saw 40,000 fewer cattle placed than last year (320,000 head). The 600-699 lb category saw 20,000 fewer cattle placed (235,000 head). The 700-799 lb category saw 35,000 fewer cattle placed (315,000 head). The 800-899 lb category saw 28,000 fewer placed (326,000 head). The 900-999 lb category saw the same number placed (165,000 head) and the 1000 lbs plus category saw the same number placed (80,000 head).
Meanwhile, carcass weights in the latest reported week ended July 19 all remained well above year ago levels but were only slightly higher than the prior week. Steer weights averaged 935 lbs, up 1 lb on the week before Heifer weights averaged 852 lbs, down 3 lbs from the week before. Overall weights averaged 864 lbs, down 2 lbs from the week before. Also of note is that cattle continue to grade a high percentage of Prime and Choice after setting a new record high of 85.35% the week ended May 10. Their combined percentage in the latest reported week ended July 19 was 84.39%. In contrast, cattle are grading below 13% Select.
On the beef side, the national boxed beef comprehensive cutout (cuts, grinds and trim) the week before last averaged $376.86 per cwt, down $10.68 per cwt from the prior week. The Choice cutout averaged $372.42 per cwt, down $14.28 per cwt, while the Select cutout averaged $360.94, down $10.71 per cwt. Formula-priced sales accounted for 53.9% of the total volume of 6673 loads. Spot market sales accounted for 31.5%, forward sales accounted for 14.5% and export sales accounted for 11.8%. The Choice cutout the first four days of last week declined by $5.36 per cwt to $361.32 per cwt and the Select cutout declined by $3.50 per cwt to $341.37 per cwt. The four-day volume was solid at 401 loads of cuts.
U.S AND EU REACHES TRADE DEAL
THE U.S. and the European Union announce a tentative trade deal just days before significant tariff hikes were set to take effect. The EU accepted tariffs of 15% on most exports to the U.S., including automobiles, chemicals and electronics. While the agreement avoided the harsher 30% rate previously threatened, many details remain unclear, especially for specific farm products. The deal itself however offered a measure of relief for U.S. agriculture groups eager to grow trade access in Europe. The EU is the fourth largest market for total exports of U.S. agricultural products, according to USDA, with a total value of $12.85 billion.
EU imports of U.S. red meat last year totaled $245m, while the U.S. imported $698M worth of red meat from the EU, said the U.S. Meat Export Federation (USMEF). It believes that addressing the EU’s tariff and non-tariff barriers is essential to expanding U.S. export growth. USMEF thanks the Trump administration for prioritizing agricultural market access in negotiations with the EU and with other key trading partners, it said. It is pleased to see that the U.S. and EU intend to work together to address non-tariff barriers inhibiting agricultural trade. The U.S. is a net importer of red meat from the EU due to the vast barriers the EU imposes on imports, said USMEF.
Importantly, the agreement averts the retaliatory duties the EU was planning to impose this week, which brings a sigh of relief for the E.U. beef trade, said USMEF. The EU’s onerous requirements mean that production for the EU starts at the birth ranch. So it is a longtime commitment, dedicated production for the EU and one of the most expensive programs for U.S. producers and processers. A sudden 30% tariff, which had been set to begin August 7, would have been devastating to the U.S. industry and to European importers and customers. U.S. pork was also targeted but U.S. pork exports to the EU are minimal due to the tariff and non-tariff barriers.
Meanwhile, President Trump last Wednesday signed an executive order that imposed from August 1 a new 50% tariff on certain imports entering the U.S. from Brazil. It was unclear however if the tariff applied to Brazilian beef imports into the U.S. If it did, such a tariff would put a halt to all imports of Brazilian beef. Should this occur, U.S. end users like small hamburger chains, further processors and small grocery stores would be most impacted. More on the importance of Brazilian beef in the U.S. on the next page.
Brazil’s May Imports Surged
U.S. beef imports soared in May, reflecting the ongoing demand for lean manufacturing beef, as CBW previously reported. Imports totaled 550M lbs, more than 60% higher year-over-year and the second highest monthly import total behind January of this year, says USDA’s Economic Research Service (ERS). Brazil was the largest contributor to the increase with imports of 175M lbs pounds, more than five times the amount imported in May 2024. Year-to-date imports from Brazil are more than double the same period last year at 666M lbs. Volume was up 347% year-over-year. The U.S. is now Brazil’s second largest beef export destination after China.
Brazilian beef imports will disappear if Trump’s imposition of a 50% tariff on Brazilian imports on August 1 included beef. The imposition of an additional 50% tariff on Brazilian beef on top of an existing tariff of 26.4% would take the tariff total to 76.4%. Trade would be unviable under those terms, say trade analysts inside and outside Brazil. January through May, the U.S. imported 165,000 metric tons of Brazilian beef, up 85% on the same period last year.
U.S. Has New Trade Deal With Korea
Meanwhile, USMEF last Thursday thanked the Trump administration for making trade negotiations with South Korea a top priority and said it was anxious to learn more details about a new U.S.-Korea trade deal. As the largest export destination for U.S. beef and a critical market for U.S. pork, Korea provides a great example of what the U.S. red meat industry can achieve in the global marketplace, said USMEF. Under the Korea-U.S. Free Trade Agreement (KORUS), Korea eliminated tariffs on U.S. pork and the tariff rate for U.S. beef, which was once 40%, will reach zero at the beginning of next year.
As a result, the U.S. industry and Korean consumers have benefited immensely, with U.S. beef exports to Korea exceeding $2 billion annually in each of the past four years, said USMEF. Pork exports last year were record large at $730M. Korea’s domestic beef and pork production have also set records under KORUS, as consumption growth has underpinned larger imports and domestic production, a win for producers and consumers. USMEF remains hopeful that Korea will address the non-tariff barriers it imposes on U.S. beef, bringing market access in line with international standards. USMEF appreciates the tireless efforts by both USTR and USDA to eliminate these restrictions, it said.
USDA TWEAKS PRODUCTION FORECASTS
USDA makes minor adjustments to its 2025 and 2026 beef production forecast. It lowers its projection for 2025 beef production less than 1% or 170M lbs from last month to 26.188 billion lbs. The forecast is updated based on actual slaughter data through the last week of June and estimated slaughter through early July, says USDA’s Economic Research Service (ERS). Further, in the third and fourth quarters, production expectations are lowered on a slower anticipated pace of cattle slaughter and slightly lower carcass weights in the second half of 2025. But the broad view remains that production is expected to decline by about 3% from 2024, says ERS.
ERS raises its 2026 beef production forecast by 2% or 540M lbs from last month to 25.815 billion lbs. This change reflects an increase from the previous month in expected feedlot placements in the second half of 2025 and in early 2026, which are likely to be marketed for slaughter in 2026, says ERS. The increase in feedlot placements is based on a shift in previous expectations for the second quarter of 2025 that was reflected in a larger year-over-year number of cattle outside of feedlots on April 1. Based on Cattle on Feed reports, feedlot placements in April and May ran at a slower pace than last year, likely due to the slower rate of marketings keeping animals in inventory and improved pasture conditions in many key regions, says ERS.