WHOLESALE beef prices might have put in their spring highs after their huge increase in April and May. The weekly comprehensive boxed beef cutouts (cuts, grinds and trim) averaged $360.32 per cwt the week before last. This meant it had increased by $28.24 per cwt in six weeks. The ascent reflected lower than normal slaughter levels and strong beef demand at home and abroad. But as CBW reported in its previous issue, demand at home will now start to be tested as retailers increase their everyday beef prices and feature beef less aggressively. The July 4 Independence Day holiday and the week leading up to it is the second largest retail beef sales period of the year. But high wholesale prices mean that retailers will primarily feature a variety of ground beef items, while featuring more pork and chicken items to put on the grill.
The comprehensive cutout the week before last was up $7.15 per cwt on the prior week, its biggest week-to-week jump so far this year. Of note was that formula-priced sales accounted for 60.1% of the total volume of 6106 loads. Spot market sales accounted for 27.7%, forward sales accounted for 11.3% and export sales accounted for 12.7%. Also of note that week was that the price of domestic lean manufacturing beef (90CL) averaged a new record high of $383.41 per cwt. This beat the previous record of $381.96 per cwt set the week ended March 29 this year. Cutout values began to show signs of weakness early last week. The daily Choice cutout declined by $1.18 per cwt the first three days. But it increased by $1.69 per cwt on Thursday.
Cash Cattle Prices Remain A Record
Conversely,cash live cattle prices set a new record high for the seventh week in a row the week before last and looked set to do the same last week. The 5-area regional trade the week before last saw steers average $229.94 per cwt live or $368.06 per cwt dressed. These were up $2.97 per cwt and $6.32 per cwt, respectively, from the prior week. Trade was light through last Wednesday and was mostly down south. The region saw 9756 head sell at $220 to $228 per cwt live. Nebraska reported 456 head selling at $235 per cwt live or $375 per cwt dressed. This revealed that Corn Belt prices continue to hold a big premium to those down south.
Steer carcass weights in the latest reported week ended May 24 increased from the prior week while heifer weights were 2 lbs lower. Both remained well above year ago levels. Steer weights averaged 944 lbs, up 6 lbs from the week before and up 24 lbs on the same week last year. Heifer weights averaged 865 lbs, down 2 lbs from the prior week but up 19 lbs on the same week last year. Overall weights averaged 872 lbs, up 1 lb from the week before and up 21 lbs on the same week last year. This was the equivalent of adding 14,222 head to that week’s slaughter total of 576,278 head, says HedgersEdge.com. Also of note is that cattle continue to grade a very high percentage of Prime and Choice. The combined grades the week ended May 10 set a new record of 85.35%. This beat the prior record high of 85.03% set the week ended March 4, 2023.
The June live cattle futures market undertone remains very solid, says analyst Kevin Grier. The fed cattle basis is wide but is unlikely to play a role in marketing decisions. Calf and yearling prices remain on an uptrend. March consumer demand was much stronger than a year ago and much stronger than average. Total slaughter in the four-week average ending May 17 was down 8% on last year. June fed cattle availability is likely to be steady to lower compared to last year. Packer negotiated cash and dressed inventories are tight but packers are more comfortable with contracts than last year. They might be pulling more formula cattle than normal, he says.
GLOBAL BEEF SUPPLY WILL DECLINE
UNCERTAINTY and unpredictability have reverberated throughout global markets since the new U.S. administration took office in January. The global cattle market is no exception, says Rabobank. With beef as one of the U.S.’s largest agricultural commodities, any change to U.S. trading arrangements has the potential to affect the beef market at a national and global level. RaboResearch’s latest quarterly beef report says global cattle markets have been trending higher in the first half of 2025. Based on the current supply and demand conditions, it expects trade flows to be maintained. But if the U.S. and major trading partners like Europe and China enter a trade war, then that could change, says the report.
European cattle prices in the first quarter experienced an exceptionally strong increase as the domestic supply contracted, while demand remained robust, says the report. The rise in European prices now puts them in line with the strong North American cattle prices, which continue to rise slowly, says Angus Gidley-Baird, senior analyst of animal protein for RaboResearch. In both Europe and the U.S., disease and pests are affecting cattle supplies. In Europe and now in the UK, bluetongue continues to affect the herd. Meanwhile, New World screwworm in Mexico has caused U.S. authorities to close the border to Mexican cattle imports and the risk of potential infestation in the US is increasing. Current animal health threats are challenging production in markets where cattle supplies are already historically low, likely further supporting elevated cattle prices, says the report.
Global beef production is expected to contract through the remainder of the year, with an overall drop of 2% in 2025, says the report. Brazil will likely see the largest contraction, down an estimated 5%, while New Zealand is estimated to be close behind with a 4% contraction. Europe, the U.S. and China are also anticipating contractions. Australia is one of the few regions expected to see a production increase, says the report. Herd contraction in the world’s four largest beef-producing nations, the U.S., Brazil, China and Europe, is expected to lead to the first global beef supply reduction since the Covid-19 pandemic, Rabobank earlier said.
Tariffs Have Been In Place for 60 Days
Tariffs were introduced on April 5 for many countries exporting beef into the U.S., says Rabobank. Additional reciprocal tariffs for certain countries are currently on hold until early July. Meanwhile, the U.S.-China tariff escalation has been paused until early August although China still has a 20% tariff in place. On top of tariffs, China has yet to renew registrations for U.S. exporting plants. As negotiations are ongoing, beef trade volumes are beginning to get redistributed around the world. Reports are emerging that Chinese buyers are looking more toward Australia, New Zealand and South America as beef suppliers, says the report.
Much of the media attention has been on the imposition of tariffs but this may only be the opener to the main event, says Gidley-Baird. In just a few months, countries have entered trade talks with 30-day time frames. The result has been more trade agreements than Rabobank has seen in decades. While tariffs may have grabbed headlines and caused headaches, the real story will be the implications of shifting global trade dynamics. The full extent of the trade war is still unfolding but RaboResearch looks at the beef market with cautious optimism. Beef isn’t being singled out as a targeted commodity, and most major exporters are only facing baseline tariffs, says Gidley-Baird explained. Early indications suggest that competitive positions will be maintained, albeit with added costs to the system. The global supply and demand situation should maintain current trade flows. But if the U.S.-China tariff war escalates and Europe becomes more involved, this is likely to change, he says.
While North American cattle prices have been high for close to two years, some other countries have experienced low cattle prices, says Rabobank. This trend has started to change as global beef supply declines start to firm up support for cattle prices in South America, Australia and New Zealand. With available supplies altered across the top global beef markets, the beef trade is expected to shift dramatically. Australian beef producers will increasingly depend on exports to absorb stronger domestic production, while Brazil will see global markets as a better demand opportunity compared to lackluster domestic demand, says Rabobank.
TRUMP LACKS TARIFF AUTHORITY
THE future of the many tariffs imposed on other countries by the Trump administration is uncertain after a trade court decision. The somewhat obscure U.S. Court for International Trade (CIT) said President Trump lacks the authority to levy sweeping tariffs on virtually all nations, a ruling that would block the duties he announced in early April on the administration’s so-called liberation day. In the May 28 decision by a three-judge panel, the CIT also called for a halt to tariffs imposed in early February on Mexico, Canada and China. Trump had declared those tariffs were necessary to force the three countries to address a national emergency involving the trafficking of illicit drugs such as fentanyl at the U.S. southern and northern borders.
The CIT ruling however was swiftly put on hold. On May 29, the U.S. Court of Appeals for the Federal Circuit granted a same-day motion by the Department of Justice for an immediate administrative stay that keeps the tariff measures in effect while the trade court’s decision is under appeal. Trump had instituted the tariffs by executive order under the International Emergency Economic Powers Act of 1977 (IEEPA), which gives the president limited latitude to levy tariffs without congressional approval to deal with an “unusual and extraordinary threat” for which a national emergency has been declared. The duties also cannot be implemented for any other purpose.
Although the initial tariffs were aimed at the smuggling of illegal drugs, the Liberation Day tariffs were put in place to remedy persistent annual U.S. goods trade deficits, which the Trump administration claimed represent a national emergency. However, the CIT determined that the worldwide and reciprocal tariffs levied exceed the powers granted to the president under the IEEPA and that the trafficking-related tariffs don’t directly address the threat for which they were instituted.
Australia Will Trigger Chinese Tariff
Meanwhile, Australia’s Beef Central reports that vigorous beef export sales into China in recent months has elevated the likelihood of Australia triggering its 2025 safeguard tariff mechanism for the market as early as late July or August. The tariff is a mechanism used in a number of Australian beef importing countries where free trade agreements apply, including South Korea, the U.S. and China. It is designed to help protect the local cattle industries from unusually large rises in imports year-to-year, says Beef Central.
China’s General Administration of Customs (GACC) announced on June 2 its 2025 safeguard tariff level for Australian beef, setting the volume at 208,300 metric tons (mt). However, the actual trigger level amount available this year is slightly less than 191,000 mt, once carry-over product from 2024 is included, says Beef Central. Once the threshold is reached, a Most Favored Nation tariff of 12% will be imposed on Australian beef imports. Last year, the carry-over safeguard figure was lower at 178,000 mt but the safeguard trigger was reached much later in the year during October. This left a shorter period exposed to the 12% tariff for the remainder of 2024. As trade has grown this year, China took 21,572 mt of Australian beef in April, 30% higher than the same month last year. Year-to-date exports to China are now at 78,116 mt, up 27% on last year.
In other trade news, theU.K.’s food and farm sector will get a major boost as the World Organization for Animal Health had downgraded the U.K.’s risk rating status for Bovine Spongiform Encephalopathy (BSE) to negligible. More avenues will now be open for trade with other countries as the U.K.’s improved risk status for beef and bovine products is recognized, says the UK’s Department for Environment, Food & Rural Affairs (DEFRA). The abattoir and meat processing industry will be able to take advantage of changes to control measures, which will reduce operational burden and release financial savings for the abattoir and meat processing industry. The UK’s improved risk status is a reflection of the UK’s global reputation for having some of the highest standards in the world for biosecurity, says DEFRA. BSE, occasionally known as mad cow disease, was a considerable public health concern in the 1980s leading to long-standing bans on British beef exports. The downgrading risk status marks a major step forward, reflecting decades of rigorous controls and opening the door to expanded trade and renewed confidence in UK beef, says DEFRA.
BRAZIL IS DECLARED TO BE FREE OF FMD
BRAZIL has just been declared to be Foot-and-Mouth Disease (FMD) free without vaccination by the World Organization for Animal Health (WOAH) after years of eradication work. The development has profound implications for the international beef trade, with the prospect of Brazil for the first time accessing some of the U.S.’s and Australia’s higher value North Asian markets like Japan and South Korea, plus the European Union, says Australia’s Beef Central. Australia and the U.S. for the past three decades have been sheltered from Brazilian competition in these high value regions by the biosecurity ban on Brazilian beef over FMD risk. While Brazil will be competitive on price, whether it can compete in more discerning markets on quality grounds, especially in the premium chilled beef trade, remains to be seen, trade sources told Beef Central.
Brazil and Bolivia joins 42 other countries, including significant beef exporting nations such as Australia, the U.S., Canada, Mexico, New Zealand and the UK, as FMD-free without vaccination, says Beef Central. The announcement came at the closing of the annual WOAH conference in Paris, where Brazil’s chief veterinary officer confirmed the decision. A formal ceremony was planned for June 6, where the Brazilian President was to meet with WOAH director general Emmanuelle Soubeyran to mark the milestone.
Brazil is already the world’s largest beef exporter, last year shipping 2.9M metric tons worth almost $13 billion, says Beef Central. But the country is heavily exposed to just one export customer, China, which accounts for about half of all Brazil’s beef exports. The president of the Brazilian Beef Exporters Assn, Roberto Perosa, said the move was a game-changing moment for his country. It strengthens Brazil’s international reputation and gives it a powerful strategic advantage in negotiations. Certification was already opening up new business opportunities for Brazil. The Philippines and Indonesia had shown immediate interest in importing beef offal under the new sanitary status, said Perosa.
Japan is due to send a delegation to Brazil next month, says Beef Central. But protocols for access to both Korea and Japan are likely to take some time before trade commences. In the absence of any free trade agreement, Brazilian exports to Japan would come under the Most Favored Nation category, attracting a tariff of about 37.5%. Australia’s tariff under the JAEPA agreement has trended down from 37.5pc pre-FTA, to 23.5% for chilled beef and 19.5% for frozen beef by 2028.
This is the first time a previously FMD-infected beef-producing country of Brazil’s scale has transitioned to FMD disease-free without vaccination status, says Beef Central. Previous countries to achieve the feat have had much smaller geographies and herd sizes. Brazil in May last year completed its final vaccination campaign against FMD, shifting instead to surveillance and biosecurity measures.
CARGILL BUYS REST OF TEYS
AUSTRALIA’S second largest beef processor will pass fully into U.S. hands following a surprise announcement that Teys Investments Pty Ltd will sell its 50% stake to joint venture partner Cargill. A wholly-owned subsidiary of Cargill will purchase all of the issued share capital of Teys Investments from the Teys family shareholders. As a result, Cargill will increase its ownership stake to 100% of Teys Australia and Teys USA, a North American sales and distribution business. These are two of the primary operating companies currently jointly owned by Teys and Cargill. With a diversified family shareholder base, the Teys family has decided it is the appropriate time to transfer the family’s interest to Cargill, a partner shareholder for the past 14 years and global leader in the food and protein industries, said a joint statement. The transfer of ownership provides continuity for Teys’ staff, partners and producers and will ensure that it continues to serve as a leading provider of healthy, high quality Australian beef products and a buyer of Australian livestock destined for local and international customers, said the statement. Teys began as a small retail butchery in 1946.