CASH live cattle prices looked set to be steady last week after a big rally the prior week. Prices had seesawed in the three weeks up to last week. The 5-area fed steer price averaged $211.14 per cwt live in the week ended April 5, then fell to $207.70 per cwt the following week. But the week before last saw live prices average $211.63 per cwt. Dressed prices averaged $336.81 per cwt, versus $327.73 per cwt in the prior week. Very little trade occurred through Wednesday last week, with only 888 head reported sold at $210-213 per cwt live. The only trade Thursday morning was in Kansas, where 2134 head were reported sold at $210 per cwt live.
Steer and heifer carcass weights in the latest reported week (ended April 12) declined slightly from the week before but remained well above year ago levels. Steer weights averaged 946 lbs, down 3 lbs on the week before but up 24 lbs on the same week last year. Heifer weights averaged 872 lbs, down 2 lbs from the week before but up 21 lbs on the same week last year. Overall weights averaged 877 lbs, even with the week before and up 29 lbs on the same week last year. This was the equivalent of adding 19,285 head to that week’s slaughter total of 563,972 head, says HedgersEdge.com.
Weekly harvest levels are likely to trend modestly higher for the balance of this year on a seasonal basis, says Andrew Gottschalk, HedgersEdge.com. Grazing conditions will play a vital role in the level of cow and heifer slaughter for the balance of this year. Heifer slaughter is expected to decline, while the level of cow harvest is expected to increase from the sharp declines registered last year. Seasonally, beef cutout values should be trending higher, he says. The expected improvement in beef demand must begin to develop and quickly. The best demand period of the year is upon the industry. This must be reflected in rising beef cutout values into mid-May. Price resistance at $340 per cwt for the Choice cutout has yet to be breeched. The failure to do so would not bode well going forward, as weekly harvest levels are expected to increase seasonally, he says.
Demand concerns abound and are materializing daily, says Gottschalk. Consumers’ optimism about future income, which had held up quite strongly in the past few months has largely vanished. This suggests that worries about the economy and labor market have started to spread into consumers’ assessments of their personal situations, as noted by the Conference Board. To summarize, beef cutout values need to begin their post-Easter seasonal advance. It is after all, post-Easter, he says.
Beef Cutout Values Remain Steady
Boxed beef cutout values remained steady last week after declining the week before last. That week saw the national comprehensive boxed beef cutout (cuts, grinds and trim) the week average $332.08 per cwt, down from $336.53 per cwt on the prior week. The Choice cutout averaged $331.16 per cwt, down from $334.48 per cwt. Spot market sales accounted for 29.7% of the total volume of 6889 loads, formula sales accounted for 54.9%, forward sales accounted for 8.5% and export sales accounted for 10.7%. The Choice cutout the first four days of last week increased by $2.18 per cwt to $333.70 per cwt.
Meanwhile, Reuters reported last week that American beef is quickly being eliminated from Chinese restaurant menus, increasingly in favor of Australian alternatives. The U.S. typically sends about $125M of beef to China each month. But U.S. beef now faces tariff of 135% to 145%. Other select U.S. agricultural imports to China also face steep levies, with wheat at 140%, corn at 140%, sorghum at 135% and soybeans at 135%.
INDUSTRY STILL FRONT-END LOADS SUPPLY
THE U.S. beef industry is still front-end loading the marketable fed cattle supply, says Andrew Gottschalk, HedgersEdge.com. The marketing rate (marketings versus cattle on feed) was second lowest on record in March for that month, only above the rate in March of last year. As such, carcass weights are at record high levels for this time period. Cattle on feed 150 days or longer project to peak by May 1, followed by declining numbers into October, he says. The estimated decline for that period this year is 608,000 head, versus a decline of 636,000 head last year. However, one needs to recognize this drop is warranted as the beginning total on May 1 is 126,000 head above the prior year and 389,000 head above the previous five-year average, he says.
While the decline in this category of cattle from May 1 to October 1 is greater than last year and more than the previous five-year average, the beginning inventory on May 1 is also much larger, says Gottschalk. Thus, the front-end supplies within this category of cattle should remain at a higher level than in prior years. Carcass weight data should confirm this condition. Be reminded that each 8.5 lb gain versus the prior year adds 1% to weekly beef production, he says. Carcass weights attain their seasonal low during June and then trend higher into mid-November. During the previous five years, monthly average steer and heifer carcass weights advanced 45 lbs and 32 lbs, respectively, from the seasonal low into the end of the year. One should monitor this change to determine if the industry is gaining or losing currentness in the marketing of fed cattle, he says.
The feeder cattle and calf supplies outside feedyards on April 1 were estimated to be 18.674M head, an increase of 145,000 head above year ago levels, says Gottschalk. The increase in this category is the result of first quarter placements being down 216,000 head from the prior year, not because of herd expansion. The dilemma facing the fed cattle sector is that the utilization of the calf crop is near its limit. Why is this so? He notes the annual decline occurring in calf slaughter. The total cattle inventory has declined from a 1975 peak, followed by a peak in the annual calf crop in 1977. However, annual calf slaughter has been in a decades-long decline. Reducing the calf slaughter added to the available supply of feeders for feedlot placement in past years. This option, which benefited the feeding business, has now been virtually depleted, he says.
The declining calf slaughter as a percent of the calf crop is approaching zero and can no longer supplement the supplies for feedlot placement, says Gottschalk. This condition will continue to lend price support to the feeder cattle and calf market, as the domestic supply well has dried up. The only ways to alleviate this issue are through domestic herd expansion, importing of feeder cattle and calves, or by short-term herd liquidation, which would eliminate heifer retention and add them to the available feeder supply for placement, he says.
Heavier Weights More than Offset Lower Kills
Heavier carcass weights are more than offsetting a lower pace of slaughter, says USDA’s Economic Research Service (ERS) in its latest monthly Livestock, Dairy and Poultry Outlook report. ERS thus raised its forecast for 2025 beef production forecast fractionally from last month’s projection by 15M lbs to 26.700 billion lbs. Compared to last month’s forecast, fewer steers and heifers are expected to be processed this year, it says. But that decline is more than offset by an adjusted outlook for cow and bull slaughter and for heavier carcass weights in each quarter. Specifically, fewer fed cattle in the slaughter mix are anticipated in the second and third quarters. This will reflect a slower projected pace of slaughter based on fewer placements in the first quarter than previously thought, says ERS.
The first quarter saw the largest proportion of steers and heifers in the slaughter mix since 2006 and the heaviest fed cattle carcass weights for this time of year, says ERS. Subsequently, this elevated average carcass weights for total cattle slaughtered to all-time highs for any quarter. For the remainder of the year, weights are raised on a slightly slower pace of slaughter, suggesting the percent of fed cattle on feed over 150 days will likely remain relatively high. Tight cattle supplies and beef demand are fundamental to price support, says ERS. In March, the weighted average price for feeder steers weighing 750–800 lbs at the Oklahoma National Stockyards was $283.18 per cwt, more than $31 per cwt above March 2024. According to the April 7 auction report for the Oklahoma National Stockyards, feeder steer prices dropped roughly $20 from the previous week to $270.90 per cwt. For that sale, receipts were down sharply relative to recent weeks due in part to inclement weather, says ERS.
Fundamentals Still Play Price Role
Despite market volatility and the futures market indicating lower prices in the deferred contracts during the week of April 7, economic fundamentals with tight cattle supplies still play a role in supporting prices in the outlying quarters, says ERS. Based on weekly data from the USDA, AMS National Feeder and Stocker Cattle Summary report, sales of feeder and stocker cattle in the first two months were down 15% from the same period in 2024. This was likely due to a 75% year-over-year decline in feeder cattle imports due to restrictions on cattle from Mexico over the first two months, says ERS.
This led to feedlots in Kansas and Texas placing 5% and 21% fewer cattle, respectively, in January and February compared to the same period last year, says ERS. Although the weekly volume of feeder cattle imports from Mexico is expected to improve moving forward, annual volume is projected below year ago levels. Based on price data through early April and weaker expected first quarter placements, ERS raised its second quarter forecast for feeder steer prices by $7 to $280.00 per cwt. Prices in the third and fourth quarters were raised $8 per and $7 per from last month to $282.00 per cwt and $286.00 per cwt, respectively. These changes raised the annual feeder steer price to $281.03 per cwt, a 12% increase from last year, says ERS.
Slaughter steers in the 5-area marketing region averaged $207.96 per cwt in March, more than $20 above 2024, says ERS. Weekly prices appear to have put in an early spring peak during the week ending with March 23 at $212.76 per cwt, which has been supported by record wholesale beef prices for this time of year. With first quarter beef production at 99.8% of last year, wholesale beef prices suggest that demand remains robust through early 2025, says ERS. But for the rest of the year, the 2025 forecast for U.S. beef exports is lowered from last month by more than the reduction in beef imports, which is increasing per capita availability of beef in the U.S.
Although this could soften support for slaughter steer prices in the outlying quarters, supply fundamentals and current price strength bolster the outlook for slaughter steer prices, which ERS has raised from last month. Further, weekly comprehensive wholesale beef prices are showing quite a bit of strength ahead of what is typical in the runup to the spring grilling season in April and early May. In the outlying quarters, forecasts for live cattle prices are raised $6, $8, and $7 per cwt from last month’s forecast for an annual price of $205.51 per cwt, nearly 10% above 2024, says ERS.
Uncertainty Lowers Imports And Exports
Uncertainty in global trade conditions lowers both import and export forecasts for 2025, says ERS. U.S. beef exports in February were 227M lbs, 7% lower year-over-year. Monthly exports to China, Mexico, Taiwan, and Japan were all lower year-over-year. Although year-to-date exports to China were higher year-over-year through February, U.S. export sales to China dropped off severely in March as the General Administration of Customs of China allowed the registration of most U.S. beef export facilities to lapse in mid-March. Without updates to the registration list, a significant portion of U.S. beef production is ineligible to be exported to China, it says.
Additionally, any remaining product that would be eligible for export to China would now be subject to retaliatory tariffs, in addition to the previously effective tariff rate of 12%, sys ERS. These factors, which are assumed to remain in place, are expected to severely restrict U.S. beef exports to China. In 2024, exports to China represented 16% of total U.S. beef exports, the third largest export market for U.S. beef. With exports projected to substantially decline to that market this year, some exports that would have otherwise gone to China may be redirected to other markets such as Japan and South Korea. However, with economic headwinds that were already facing U.S. beef exports in these markets, there may not be sufficient demand to absorb all of the product given the high prices. Therefore, ERS reduced its beef export forecast for 2025 by 135M lbs to 2.685 billion lbs, which if realized would be an 11% decrease year-over-year. On the import side, total U.S. beef imports are running higher year-over-year, mostly due to the record imports in January, although imports in February were also higher year-over-year (up 6%). Due to the strong pace of imports so far, ERS raised its forecast for first quarter imports by 30M lbs to 1.360 billion lbs.
LIKELIHOOD OF RECESSION RISES
THE likelihood of a tariff-induced recession is rising in the U.S. and worsening consumer sentiment is jeopardizing what was expected to be a recovery year for foodservice and retail. So says Rabobank in its April Agribusiness Review. Trade disruption begins to weigh on pork values, leaving producers cautious, while milk production returns to growth while tariff risks linger. Beef demand remains strong across North America, with U.S. retail beef prices reaching new highs. Trade wars, macroeconomic uncertainty and the prospect of a record 2025/26 crop make it hard for corn producers to capitalize on improved old-crop fundamentals, says Rabobank.
Stronger beef and cattle demand across North America provides the markets for both with some resiliency in early, 2025, says Rabobank. But uncertainty persists as global market adjusts to trade news. Trade negotiations between the U.S. and its global partners are evolving every day and Rabobank expects that to continue throughout much of 2025. Yet for U.S. beef markets, one constant remains, it says. U.S. consumers largely consume domestically-sourced beef. U.S. beef imports in 2024 were record large, surpassing 4.6 billion lbs. But that volume represented only 18% of U.S. beef consumption. U.S. steer and heifer slaughter is approximately 66% of domestic consumption, while another 16% is from U.S. cull cows and bulls, says Rabobank.
U.S. beef exports are also a relatively small volume, representing 11% of production in 2024, says Rabobank. Maintaining a free-flowing cattle and beef trade with Canada and Mexico will remain important to U.S. capacity utilization as domestic cattle supplies decline. Collectively, the North American trade partners represent 11% of U.S. beef consumption. Furthermore, Chinese tariff and non-tariff barriers complicate U.S beef export market access going forward, while China has been a top three market for U.S. beef overt the last three years, it says.
Beef Demand Remains Exceptional
U.S. beef demand remains exceptional ahead of the spring demand period, says Rabobank. USDA’s All Fresh retail beef price posted a new all-time high in March of $8.42 per lb (the Choice price was also record high at $8.75 per lb). The two prices were up 6.7% and 7.8%, respectively, from March last year. Cutout prices were 9% higher over the same period. Per capita beef supplies were estimated to be 2% stronger for the quarter, and retail and wholesale beef demand were up 6% and 9%, respectively, compared to 2024, it says.
However, potential threats to beef demand exist, says Rabobank. Recession risk is elevated and increased market uncertainty is dragging down consumer confidence. The good news is that the labor markets remain relatively strong and energy prices are declining. Middle meats tend to support cutout values in April and May as buyers prepare for the grilling season. Consumer concerns could weaken the market for those higher-end cuts that have been more responsible for recent year-over-year gains in cutout values, it says.
Mexican feeder and cattle and calf imports in February were allowed into the U.S. for the first time since New World Screwworm larvae were detected in Mexican cattle last November. Rabobank estimates that 400,000 head of potential cattle imports remained in Mexico due to the temporary trade restriction. The Mexican market handled the additional cattle supplies without major issues. Nearly all U.S. cattle weights and prices are trading at or near all-time highs, it says.
Canadian cattle supplies meanwhile adjust lower and prices trend higher, says Rabobank. Aside from a brief correction as potential tariffs disrupted cattle markets in early March, Canadian cattle prices in 2025 have been trading near record highs for most weight classes. Tighter cattle supplies remain price supportive to the market. On January 1, beef cow inventories were down 2% on a year earlier, feedlot inventories were down 4% and total feeder cattle and calf supplies were down 2%. Federally-inspected cattle slaughter is down 8% year-to-date, compared to 2024, says Rabobank.