CONSUMERS get minor relief on beef prices as retail prices in January fell somewhat from December. USDA’s All Fresh beef price averaged $9.47 per lb, down eight cents from the month before. The Choice price averaged $9.93 per lb, down 15 cents from the prior month. But the prices were up 16.2% and 16.4%, respectively, from January 2025. February retail beef prices are expected to print lower again, as February is the weakest demand month of the year for beef. The industry cannot expect much relief next month either, as March is the second weakest demand month of the year.
The beef product market has yet to respond to the reduced levels of production, suggesting that the current levels are not low enough to stimulate interest and will need to move even lower, says Bob Wilson, HedgersEdge.com. While the last four weeks saw cash live cattle prices advance over 6.5%, the Choice cutout was up less than 2%. The average retail beef price fell in January from the previous month as consumers adjusted their purchases for the uncertainty they feel. As the song lyrics say, “someone’s going to have to explain it to me.” This type of economic environment is not sustainable. The reported export activity slipped back to the average level seen last year, posting 792 loads in the latest weekly report. This was down more than 10% from the previous week and was 23% below the same week a year ago, he says.
Cutouts Make Modest Headway
Cutouts values made only modest headway the past two weeks. The comprehensive cutout the week before last averaged $366.87 per cwt, up 37 cents on the week before. The Choice cutout averaged $365.30 per cwt, up $2.40 per cwt. Spot market sales accounted for 27.1% of the total volume of 6409 loads of cuts and trimmings. Formula sales accounted for 57.6%, forward sales accounted for 15.3% and export sales accounted for 12.4%. The Choice cutout the first four days of last week increased by $0.70 per cwt to $365.17 per cwt.
At the same time, cash live cattle prices have continued to rally. They set a new record high for the 5-area steer average the week before last. The 5-area price averaged $245.62 per cwt live or $381.13 per cwt dressed. These were up $4.31 per cwt and $3.13 per cwt, respectively, from the prior week. The live price exceeded the previous all-time record of $244.25 per cwt live set the week of August 24 last year. New highs were reported in the Southern Plains, with most of the volume reported in Kansas and averaging near $248.25 per cwt. This means the price spread between the north and the south has widened in recent weeks, reflecting tighter market-ready supplies down south. The only trade through Thursday last week was of 36 head in Iowa. It was expected that the Friday sales pattern of the week before last would be repeated.
Meanwhile, earlyindications suggest that 2026 has begun about where 2025 left off, with smaller feedlot placements along with a slow feedlot marketing pace and cyclically declining feedlot inventories. So says analyst Mike Sands of MBS Research. January placements were projected near 95% of last year’s small volume, which pares the monthly total to the smallest since 2007 and 11% below the 2016-19 average, he said in comments ahead of last Friday’s Cattle on Feed report. Although estimated feeder cattle supplies outside feedyards began the year slightly larger than a year earlier, availability remains historically small in the wake of shrinking calf crops, restricted imports and a modest rise in heifer retention, he says. CBW reports further on Sands’ analysis of the market in its next story.
RECORD PRICES DAMPEN PLACEMENTS
RECORD high prices on feedyard replacements, accompanied by escalating breakevens despite lower feed costs, continued to dampen cattle feeder interest in January, says Mike Sands, MBS Research. Stiff competition for limited feeder cattle supplies amid excess feeding capacity, backgrounding programs and modest herd rebuilding efforts likely will keep a lid on placements in the months ahead, although a few more cattle on wheat and small grains pastures may temper placement declines in the months ahead, he says.
January marketings were projected near 87% of last year and 9% below the 2016-19 average, says Sands. Although a portion of the marketing shortfall was related to one less business day during the month, the marketing pace was still historically slow. Feedlot sales as a percentage of the January 1 feedlot inventory slipped near 14%, well off the pace of recent years of near 15.5%. This slow marketing pace maintains the elevated inventory of cattle on feed over 150 days and remains a significant contributor to record heavy carcass weights and favorable grading percentages. With placements exceeding the small marketing volume, February 1 feedlot inventories were slightly larger than a month earlier, he says.
The February 1 feedlot count was estimated near 98% of a year earlier and was seasonally larger than January 1, says Sands. Feedlot inventories remain much larger than might be anticipated considering the continued slide in placements, which declined nearly 1.5M head during 2025. Still, the feedlot inventory is only about 200,000 head smaller than last year. Incentives remain in place to sustain the slow inventory turnover, at least for the time being, he says.
TEXAS AG HEAD OFFERS HERD REBUILD IDEAS
WITH America’s cattle herd at its lowest level in more than 75 years, Texas Agriculture Commissioner Sid Miller is calling for an aggressive America First beef policy to rebuild herds, strengthen food security and lower grocery prices for American families. Persistent drought and bad Biden Administration trade deals have hammered U.S. ranchers, he says. It’s time to double down on American beef, rebuild herds and put producers, not foreign imports first. The industry doesn’t need more foreign beef imports making it worse, it needs more American beef, says Miller. The next Farm Bill must stand firm with American ranchers. Miller praised President Trump for reopening global markets closed under the Biden Administration but cautioned that the recent agreement to expand Argentine beef imports should be viewed as only a short-term measure.
Miller says he applauds President Trump’s leadership in reopening American markets around the world. But increasing Argentine beef imports is not America First or rancher first. While he understands President Trump’s focus on short-term solutions, the industry must pair that with a lasting America First, Texas First approach built on herd recovery, market fairness and real food security. Short-term fixes matter but the real win comes from a long-term America First, Texas First plan that rebuilds herds, markets, and producers’ independence, says Miller.
Miller’s America First Beef Policy Priorities include: Federal heifer retention tax credit to incentivize ranchers to retain breeding stock and rebuild the national herd rather than sell during tight margins and drought; Rebuild before importing by aligning trade policy with America’s production goals and end the undercutting of U.S. beef producers; Expand drought relief and grazing access by quickly opening an additional 19M acres of federal grazing land to keep herds alive and support long-term herd stability; Strengthen market transparency by reforming anti-competitive practices, back U.S.-owned processors and improve price discovery to boost fair competition for ranchers; Enforce mandatory country of origin labeling (COOL) to ensure that consumers know exactly where their beef comes from and to protect the integrity of the “Product of USA” label.
Miller also credits USDA’s updated beef plan, inspired he says in part by his earlier policy calls, for making progress on processing capacity, market transparency and rancher support. Still, he warns that trade policy shifts must not derail domestic rebuilding efforts.
TAIWAN EXPORTS WILL BENEFIT FROM PACT
BEEF and pork exports to Taiwan will benefit from a reciprocal trade agreement between Taiwan and the U.S. Taiwan has agreed to substantially reduce tariffs and remove non-tariff barriers on U.S. imports as well as provide preferential market access for a host of U.S. agricultural exports. The agreement will cut tariffs on U.S. pork exports by half and eliminate other restrictions. It will also allow for duty-free access to Taiwan for U.S. beef exports.
Beef producers celebrated the signing of the agreement. Taiwan is the fifth largest export market for U.S. beef, valued at $650 annually, according to the U.S. Meat Export Federation (USMEF). Strong, science-based trade agreements are essential to adding value for U.S. cattle producers, and Taiwan has emerged as one of the strongest international markets for U.S. beef, said Gene Copenhaver, president of the National Cattlemen’s Beef Assn. Duty-free access improves competitiveness and provides long-term certainty for producers who depend on export markets to maximize the value of every animal. Foreign markets play a critical role in producer profitability, with beef exports accounting for more than $415 per fed cattle processed in 2024. American cattle producers look forward to this expanded market access for years to come, thanks to the work of President Trump and US Trade Representative Ambassador Jamieson Greer, he said.
The National Pork Producers Council (NPPC) said it sees the agreement as a win for pork producers and believes it to be a direct result of the group’s long-fought effort to secure greater market access in Taiwan. NPPC’s 15-plus year endeavor to break down trade barriers in the high value market of Taiwan has paid off, said NPPC president Duane Stateler. This means more U.S. pork on international tables and more opportunities and prosperity for American producers. He also thanked Trump and Greer.
Pork Deal Has Six Other Parts
NPPC outlined six other ways in which the agreement specifically supports the U.S. pork industry. It will follow maximum residue levels (MRLs) set by the Codex Alimentarius Commission for ractopamine in pork fat, kidney, liver and muscle. For other edible offal, the MRL will be set at 0.09 ppm (90 ppb) or any Codex MRL. It will eliminate import licensing procedures that restrict U.S. imports, as well as removing facility and product registration requirements. It will end 100% batch-by-batch inspection for ractopamine residues and country of origin labeling requirements on U.S. pork products in favor of import inspection rates based on compliance history. It will accept U.S. pork from all plants listed in USDA’s Meat and Poultry Inspection Directory, which is maintained by its Food Safety and Inspection Service (FSIS), without requiring audits before exporting. It will accept FSIS-issued export certificates and electronic data elements and limiting unnecessary attestations. It will recognize within six months the African swine fever protection zone established by the U.S.
USMEF president and CEO Dan Halstrom was in Taipei, Taiwan, at the time of the announcement. He noted that U.S. pork has been at a disadvantage in Taiwan compared to competitors for a long time, particularly due to consumer distrust in the market. U.S. pork also faces challenges in Taiwan that date back to Taiwan’s decision several years ago to amend its zero tolerance policy for ractopamine residues. While there have been no violations or safety issues related to ractopamine in U.S. pork, the move generated negative publicity that has been difficult to overcome, he said.
Halstrom believes the U.S.-Taiwan agreement could be a step in the right direction toward improving sentiment. The U.S. faces a real issue with consumer acceptance of U.S. pork in Taiwan, and this will go a long way and not only get the U.S. on a level playing field tariff-wise but hopefully will help it to improve the perception of U.S. pork in Taiwan. The agreement includes significant market access gains for U.S. beef lamb and bison, he said. President Trump’s leadership in the Asia-Pacific region continues to generate prosperous trade ties for the United States with important partners across Asia, while further advancing the economic and national security interests of the American people, said U.S. Trade Representative Jamieson Greer.
SMITHFIELD PLANS GIANT NEW PORK PLANT
SMITHFIELD Foods, the world’s largest pork processor, plans to build a huge new pork processing in South Dakota. This marks the first new facility built by Smithfield in decades. It also marks the first large new pork plant in the U.S. since 2006 when Seaboard Farms opened a new plant in Guymon, Okla., and Triumph Foods opened a new plant in St. Joseph. Mo. Smithfield’s new plant will have the capacity to process 20,000 hogs per day. Smithfield will spend about $1.3 billion over three years on a new facility in Sioux Falls. When in operation, the plant is expected to employ about 3000 workers. The new project will replace Smithfield’s existing facility in the city, which is more than 100 years old.
Smithfield processes nearly 30M hogs per year and is a major supplier of ham, bacon and other pork products to retailers. Its plans come a year after returning to U.S. public markets. Smithfield’s stock is up nearly 20% since the listing. The U.S. [meat] industry in general is older and dated, said Smithfield CEO Shane Smith in an interview. This sends a signal that Smithfield is in the pork industry for the long term. It is not going anywhere, he said.
The project could face scrutiny from U.S. officials concerned about foreign ownership of meat production and agricultural land, said reports. Smithfield since 2013 has been a subsidiary of Chinese pork company WH Group. At that time, the $4.7 billion deal was one of the largest takeovers of a U.S. company by a Chinese firm. The ownership of Smithfield and its U.S. assets has drawn scrutiny from lawmakers and the Trump administration. The company has said it is investing in the U.S. and denied accusations that its decisions are influenced by the Chinese government. “Do I expect to hear some noise, asked Smith. “Probably. But do I think it should rise to a level where it’s an issue? I don’t think so,” he said.
Smithfield is 89 Years Old
Founded in 1936, Smithfield helped pioneer the methods that made the U.S. a global pork powerhouse. Its home base has remained in its namesake Virginia home town, also known as the “Ham Capital of the World.” The new South Dakota plant will expand its packaged meats production, a priority for Smithfield’s CEO. It would be the second largest plant for Smithfield in the U.S., behind its Tar Heel, N.C., facility, which is the world’s largest pork processing facility by volume (34,500 head per day).
Construction of a new meatpacking facility would follow several recent plant closures, which CBW has reported on. Tyson Foods on January 20 closed one of its largest beef processing plants in Lexington, Neb., which employed 3200 people, and cut production in half at its Amarillo, Texas beef processing plant. JBS and Cargill have said in recent weeks that they are closing smaller processing facilities. Cargill plans to shutter its ground beef processing plant in Milwaukee, Wis. The plant, which employs approximately 221 workers, will cease operations by April 17 and close by the end of May, says Cargill.
Cargill has made the difficult decision to close its Milwaukee ground beef facility to better align its portfolio with current customer demand and prioritize investments where they are needed most for the future, it says. Ground beef produced at the Milwaukee plant will be shifted to Cargill’s other secondary beef processing facilities, which includes its Butler, Wis. plant. Cargill has owned the Milwaukee plant since 2001 as part of its acquisition of Emmpak Foods. The plant through various owners dates back to its founding in 1918. Smithfield’s new Sioux Falls plant will run more efficiently than other plants, featuring advanced automation technology and a streamlined design, said Smithfield. Work on the site is expected to begin this spring. Smithfield plans to formally break ground on construction in the first half of 2027 and begin production at the end of 2028. The company said the plant will source nearly all of its hogs from nearby farmers in South Dakota, Iowa and Minnesota.