CATTLE feeders maintain their leverage over fed beef processors, despite packers’ best efforts to limit live cattle purchases. Packers also limit beef production as the start of the grilling season approaches vin an attempt to prop up beef cutout values. Cattle prices the week before last increased for the fourth week in a row. The 5-area steer prices averaged $248.38 per cwt live or $388.44 dressed. These were up $3.42 per cwt and $3.85 per cwt, respectively, from the week before. Both were all-time record highs.
The cash trade through last Wednesday was light. Texas reported 1377 head sold at $248 per cwt live, with 148 head selling at the same price in Kansas. Nebraska reported 995 head sold at $388 per cwt dressed. Thursday saw a more active trade in all regions. Prices were $246-248 per cwt live or $388-392 per cwt dressed. The higher dressed price was in Iowa. Meanwhile, fed cattle graded a record high percentage of Prime and Choice for the seventh week in a row. For the week ended April 4, cattle graded 14.78% Prime and 73.45% Choice. The total of 88.23% exceeded the prior week’s record of 88.13%.
Carcass weights began the year at new record highs for all three categories. They declined after that but steer and heifer weights put in new all-time highs in the week ended March 14. Steer weights averaged 989 lbs, equaling the record set in the week ended January 3 this year. They were up 42 lbs on the same week last year. Heifer weights averaged 903 lbs, up from the previous record set the week before and up 32 lbs from the same week last year. Overall weights averaged 904 lbs, 1 lb shy of the record set the week ended January 3. They were 33 lbs above the same week last year. Weights have declined only slightly since then. Overall weights in the week ended April 4 averaged 900 lbs, down 2 lbs from the prior week. Steer weights averaged 981 lbs, down 2 lbs, and heifer weights averaged 897 lbs, down 3 lbs from the prior week.
First Quarter Produced 6% Less Beef
With carcass weights posting all-time record high levels during the first quarter, total commercial beef production in the quarter was down 6% on last year, says Bob Wilson, HedgersEdge.com. This would equate to a 395M lb reduction in beef production from the first quarter of 2025, which in turn is more than half of the annual total production cut projected for this year. In the economic world, reduced production generally begets higher prices, as already seen this year. With the bulk of lower production already occurring, economic thought would suggest that it will be difficult to sustain beef prices much higher than have already occurred, he says.
Packer margins by last Wednesday were negative by just over $200 per head. As with the week before, the deterioration in margins was due to increased live cattle prices and a continued decline in beef cutout values. The comprehensive cutout the week before last averaged $390.15 per cwt, down $4.71 per cwt from the prior week. The Choice cutout averaged $386.41 per cwt, down $5.41 per cwt. Spot market sales accounted for 29.3% of the total volume of 6325 loads of cuts, grinds and trim. Formula sales accounted for 56.0%, forward sales accounted for 14.7% and export sales accounted for 10.8%. The daily Choice cutout the first four days of last week increased by $0.67 per cwt to $381.57 per cwt. One feature was that the Select cutout reverted to a discount to Choice last Tuesday after being premium every day the week before.
SECTOR NAVIGATES UNPRECEDENTED VOTALITY
THE U.S. livestock sector is currently navigating a period of unprecedented volatility, A big rally in June live cattle futures represents a confluence of critical supply-side pressures that have sent shockwaves through the commodities market, signaling a period of prolonged high prices for both producers and consumers. Market analysts point to a triple threat of factors, historically low cattle inventories, devastating wildfires across the Nebraska plains and a significant labor stoppage at a major processing facility (now resolved) as the primary catalysts driving this record-breaking price action. So says an analysis by online publisher Financial Content’s Market Minute. CBW was unable to verify who wrote the report, which was published nearly two weeks ago and was aimed at investors.
As of April 7, the convergence of these events has tightened the beef supply chain to a degree not seen in decades, says the analysis. The immediate implications are clear. Wholesale beef prices are climbing and the cost of maintaining inventory for meatpackers is reaching unsustainable levels. For investors, the surge in the futures reflects a market that is pricing in a severe scarcity premium, as the industry grapples with the realization that the multi-year contraction of the U.S. cattle herd shows no immediate signs of reversing.
The current spike in cattle futures is not the result of a single isolated incident but rather the culmination of several catastrophic events hitting the supply chain simultaneously, says the analysis. Leading the charge is the latest USDA annual inventory report, which confirms that the U.S. cattle herd on January 1 dwindled to 86.2M head, the lowest level since 1951. This 75-year low is the result of eight consecutive years of contraction, spurred by persistent droughts and high input costs that forced ranchers to liquidate their breeding stock long before the current crisis began.
Adding to the industry’s woes is the catastrophic Morrill Fire in Nebraska, which has become the largest wildfire in the state’s history, says the analysis. More than 820,000 acres of vital grazing land have been scorched, displacing an estimated 40,000 cattle. The destruction of fencing and forage means that even the cattle that survived the flames cannot be supported locally, forcing immediate and costly relocations. This loss of infrastructure in one of the top beef states has effectively paused any hope of herd rebuilding in the Central Plains for the foreseeable future, says the analysis.
Analysis Reviews Strike’s Impact
Compounding these environmental factors was a major labor dispute at the JBS beef plant in Greeley, Colo., says the analysis. While workers returned to their shifts April 7, the three-week stoppage created a backlog of un-slaughtered cattle and a vacuum in the wholesale beef market, further accelerating the price climb for June delivery contracts. The current market dynamics present a complex landscape for public companies involved in the protein sector. For JBS, the strike at its Greeley plant was a double-edged sword. While the plant’s idleness hampered short-term revenue, the company stood to benefit from the higher margins that typically accompany extreme supply tightness once production resumes. However, the rising cost of live cattle may squeeze their processing margins if they cannot pass the full cost on to retailers, says the analysis. (Editor’s note: This in fact is what happened in the second week of April).
Competitors such as Tyson Foods may find themselves in a slightly more advantageous position in the short- term, as they haven’t faced the same degree of labor disruption recently, says the analysis. However, Tyson’s beef segment is also vulnerable to the live-to-cutout spread, the difference between what they pay for the animal and what they sell the meat for. With cattle prices well above $244 per cwt live, Tyson’s margins are under intense pressure. On the retail and foodservice side, the impact is equally stark, says the analysis. Companies like McDonald’s Corporation and Restaurant Brands International, the parent of Burger King, are seeing their primary input costs skyrocket. These giants have significant pricing power. But with cattle prices at record highs, they may be forced to choose between raising menu prices or absorbing the cost, potentially impacting their 2026 earnings projections.
Situation Illustrates The Great Contraction
The current situation in the livestock sector is a vivid illustration of the Great Contraction of American agriculture, says the analysis. This isn’t merely a temporary supply glitch, it is a structural shift that fits into a broader trend of climate-related risks and labor unrest. The Nebraska wildfires serve as a grim reminder of how environmental volatility can instantly erase years of herd growth, while the JBS strike highlights a growing assertiveness among essential workers in the food supply chain who are demanding a larger share of record corporate profits, says the analysis.
The cattle cycle historically takes years to turn, says the analysis. Unlike the poultry industry, which can increase production in weeks, or the pork industry, which takes months, the biological life cycle of cattle means that the current scarcity will likely persist through 2027 and into 2028. This event echoes the 2014-2015 beef spike but with the added complications of modern labor strikes and more frequent extreme weather events. Regulatory bodies and the USDA are also watching closely, as the high concentration of the meatpacking industry remains a point of political contention, especially when consumer prices at the grocery store begin to outpace general inflation, says the analysis. The ripple effect extends to international markets as well. With U.S. beef becoming prohibitively expensive, export demand may soften as global buyers look to South American producers. This shift could permanently alter trade flows, making it difficult for the U.S. to regain market share even when prices eventually stabilize.
Investors should also monitor upcoming USDA Cattle on Feed reports to see if the wildfire-related liquidations result in a temporary surge of cattle hitting the market, which could provide brief price relief before the long-term scarcity takes hold again, says the analysis. In the long run, the industry must adapt to a new normal of higher floor prices. Ranchers will need significant capital and favorable weather to begin the multi-year process of rebuilding herds. Strategic pivots may include an increased focus on regenerative grazing to mitigate wildfire risks and investment in automated processing technologies to reduce reliance on vulnerable labor pools. For the market, the opportunity lies in identifying which companies have the most robust supply chains and the best ability to manage the extreme volatility of input costs, says the analysis.
As 2026 moves forward, the market will likely remain in a buy the dip mentality, supported by the reality that you cannot manufacture more cattle overnight, says the analysis. Investors should keep a close eye on retail demand. At some point, the beef-chicken switch will occur if consumers find $20 per lb steaks untenable. For now, the cattle market remains the most volatile and closely watched sector in commodities, with every weather report from the plains and every labor update from the packing houses carrying the weight of millions of dollars in market value, says the analysis.
TEXAS WARNS AGAIN ABOUT NWS
STATE officials in Texas continue to warn stakeholders about the possibility of New World screwworm (NWS) following another detection in Mexico. The latest update from Texas Ag Commissioner Sid Miller said NWS was found 90 miles from the U.S.-Mexico border in Nuevo León, according to an April 10 update. The New World screwworm is not some distant problem, he said. It is a direct and imminent threat to Texas and we are treating it that way. This is a high-stakes situation for our ranchers, our livestock industry and our food supply, and we are moving aggressively to stay ahead of it. Texas producers should remain on high alert, check their animals and report anything unusual, he said.
USDA’s Animal and Plant Health Inspection Service provided an update to the NWS response playbook. The federal and state governments have also added more resources for combating a possible outbreak of NWS in the U.S. During February, Agriculture Secretary Brooke Rollins, Texas Governor Greg Abbott and several other federal, state and local officials opened a sterile fly dispersal facility at Moore Airfield Base in Edinburg, Texas. USDA hopes to produce sterile flies in Edinburg by 2027. Supplies of the flies are currently coming from its COPEG facility in Panama.
WORKERS SEEE GAINS AFTER STRIKING
A THREE week strike by workers at JBS USA’s Greeley, Colo., beef processing plant brings several gains for nearly all who work at the plant. United Food and Commercial Workers (UFCW) Local 7 ratified a new collective bargaining agreement with JBS USA on April 12. The terms of the new deal run through April 2028 and affect nearly 3800 workers at the facility, which has the capacity to process up to 6000 cattle per day. The agreement was reached after both sides held talks April 9-10, following a union strike that began March 16.
UFCW announced that workers would return to their jobs on April 7 before the agreement was completed. According to the union, the agreement secures wage increases, helps workers with increases in healthcare costs and protects workers from having to pay for personal protective equipment. The union said the wage increase over the next two years is 33% higher than in the tentative agreement that JBS offered Greeley workers in the pre-strike final offer.
JBS however maintains it did not change the terms from its last, best and final offer, as reported by Meat+Poultry. While JBS USA is pleased that an agreement has finally been reached, the company expressed disappointment that UFCW Local 7 leadership chose to eliminate the historic pension benefit that was part of the national agreement negotiated last year in partnership with UFCW International, the company said in a statement. An existing 401K plan remains in place following the ratification. Base wage increases were confirmed for ratification in July 2026 and July 2027 along with a $750 one-time payment at ratification and a $500 one-time payment in April 2027, according to the company. JBS added that Local 7 withdrew seven alleged unfair labor practice charges as part of the agreement. In May 2025, JBS struck a deal with United Food and Commercial Workers International, involving more than 25,000 workers and 14 JBS processing plants across the country.
NEW PLANT ADDS 50% TO OUTPUT
EMPIRICAL foods, a family-owned producer of USDA-inspected beef products, opens a state-of-the-art production facility in Garden City, Kan. The new 280,000 square foot facility will initially increase the company’s lean ground beef production by 50%, with the ability for significant future expansion. The company’s total investment in the facility was previously announced in 2020 to be $250M.
Through the long-term investment, empirical is strengthening its domestic ground beef supply by increasing efficiency, enhancing food safety and reducing food loss at time of record-high beef prices, it says. According to empirical, one third of all food produced in the world goes to waste. Addressing this issue, empirical has redesigned how lean beef is separated from fat, keeping more protein in higher-value food channels, it says.
The facility reflects a belief that efficiency is one of the most effective tools the industry has to strengthen domestic supply, says Craig Letch, president of empirical foods. Increasing the availability of beef without increasing cattle numbers supports resilience across the system, from producers through consumers. empirical also plans to become one of the U.S.’s largest tallow producers by increasing production of high quality tallow used in cooking oils, cosmetics, renewable fuels and consumer products. These expanded capabilities will broaden empirical’s portfolio, which already includes Noble Valley ground beef, Two Rivers boxed beef and pork, Dos Rios taco meat, and Jen’s Beef Bolognese and Sloppy Joe at its operations in South Sioux City, Neb.
The Garden City plant will supplement operations in South Sioux City and empirical’s headquarters in South Dakota. The new facility will create over 250 skilled and semi-skilled jobs, supported by the company’s technical team and with support from its partnership with the Garden City Community College. The facility was designed prioritizing long-term performance over short-term optimization, says the company.