THE July 4 Independence day holiday, the second best period for beef demand, is now behind the market. Now all eyes are on how demand holds up this month as retail beef prices are expected to increase to reflect the recent surge in beef cutout values. How demand holds up will in part determine whether cash live cattle prices continue to decline after reaching record high levels a month ago. Solid beef sales might encourage fed beef processors to increase their fed steer and heifer slaughter levels, especially if their margins remain in the black. They averaged a positive $59.44 per head the week before last, according to HedgersEdge.com. This was the first week of positive margins this year. They had increased to a positive $104.75 per head by last Thursday.
As CBW noted in its June 23 issue, the all-time record high for the comprehensive cutout is $421.80 per cwt set the week ended May 15, 2020. Whether the beef cutout highs seen during Covid can be equaled is still open to debate, says Andrew Gottschalk, HedgersEdge.com. The dog days of summer tend to take a bite out of consumer demand. As summer temperatures rise, an inverse relationship to consumption develops. Hamburgers and hotdogs garner an increasing portion of consumer spending. One billion hotdogs are consumed in the U.S. during July, he says. Rising employment, combined with wages exceeding the rate of inflation, has been the backbone for rising beef demand. This ongoing trend also has its limits, which could be quickly and severely tested this summer, he says.
Active Trade Sees Lower Prices
An active trade last Wednesday saw cash live cattle prices move lower for the third week in a row. The 5-area regional trade the week before last saw steer prices average $229.51 per cwt live or $369.52 per cwt dressed. These were down $5.37 per cwt and $7.05 per cwt, respectively, from the prior week. An active trade for cash cattle developed in every region last Wednesday, with cleanup-style trade expected on Thursday, says Gottschalk. Packer margins remain positive, which should encourage packers to obtain additional inventory and increase weekly harvest levels beginning this week. Trade was reported with prices at $220-$224 per cwt live, mostly $224 per cwt, on the Southern Plains. Corn Belt trade volume was active within a price range of $228-$231 per cwt live. Dressed trade evolved in a broad price range from $364-$372 per cwt.
Packers last week were purchasing for a full production schedule this week, which might have tempered cash weakness last week, says Gottschalk. This may provide temporary and limited support for the cash market prior to an anticipated retreat in prices for the balance of this month. That said, packer margins are positive, which may encourage them to increase weekly harvest levels beginning this week. The total harvest level for last week might have been challenged to attain 480,000 head. The latter in turn may lend some further support to the beef cutout temporarily at the beginning of next week, he says.
Carcass weights in the latest reported week ended June 21 all increased from the prior week. All weights remained well above year ago levels. Steer weights averaged 937 lbs, up 6 lbs from the week before. Heifer weights averaged 857 lbs, up 2 lbs on the week before. Overall weights averaged 869 lbs, up 6 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 June 21 was 84.53%. In contrast, cattle are grading below 13% Select. More market news on page 2.
CUTOUT HAS BIGGEST LEAP OF YEAR
THE national boxed beef comprehensive cutout (cuts, grinds and trim) the week before last averaged $385.34 per cwt, up $9.39 per cwt from the prior week. This was the largest week-to-week increase of the year and meant that the cutout increased by $24.46 per cwt in four weeks. The Choice cutout averaged $382.89 per cwt, up $9.60 per cwt, while the Select cutout averaged $371.78, up $8.88 per cwt. Formula-priced sales accounted for 62.2% of the total volume of 5921 loads. Spot market sales accounted for 25.9%, forward sales accounted for 11.9% and export sales accounted for 9.6%. Also of note that week was that the price of domestic lean manufacturing beef (90CL) averaged a new record high of $401.45 per cwt. This beat the previous record of $394.94 per cwt set the week before. Daily cutout values moved lower last week, even though beef production was much reduced due to the July 4 holiday.
The live cattle market cash and futures undertone looks to be weakening, says analyst Kevin Grier. The fed cattle basis is returning to normal levels and continues to indicate that sellers should sell. Calf prices have stabilized while yearling prices remain on an uptrend. The beef cutout continued to soar, supported by very low kills and good demand. April consumer demand was much stronger than the year ago and much stronger than average, he says. Total slaughter four-week average ending June 28 was down 7% on last year. The fed cattle kill four-week average ending June 14 versus 2024 was also down 7%, as was the non-fed kill four-week average week ending June 14. July fed cattle availability is likely to be steady to lower compared to last year. Packer negotiated cash and dressed inventories are tight. Packers are more comfortable with contracts than last year, said Grier.
MEXICAN IMPORTS START AGAIN
CATTLE, bison and equines from Mexico will once again be eligible to enter the U.S. through a phased reopening of risk-based ports beginning as early as today (July 7). USDA had banned these imports on May 11 due to the threat and rapid northward spread of New World screwworms (NWS). Throughout June, experts from USDA’s Animal and Plant Health Inspection Service (APHIS) conducted onsite assessments of Mexico’s NWS response efforts. Agriculture Secretary Brooke Rollins last week reported that progress had been made across several critical areas since closing the ports in May. The National Cattlemen’s Beef Assn (NCBA) announced its support for USDA’s plan to strategically reopen key ports of entry.
USDA is focused on fighting the New World screwworm’s advance in Mexico, said Rollins. It has made good progress with its counterparts in Mexico to increase vital pest surveillance efforts and have boosted sterile fly dispersal efforts. These quick actions by the Trump administration have improved the conditions to allow the phased reopening of select ports on the southern border to livestock trade. USDA is continuing its posture of increased vigilance and will not rest until it is sure this devastating pest will not harm American ranchers, she said.
The reopening of ports will follow as scheduled: Douglas, Ariz., July 7; Columbus, N.M., July 14; Santa Teresa, N.M., July 21; Del Rio, Texas, August 18; Laredo, Texas, September 15. After each reopening, USDA will evaluate the ports to ensure no adverse effects arise. Specifically, APHIS will monitor the number of cases, potential northward movement of NWS, Mexico’s continued efforts to curb illegal animal movements and the implementation of further rigorous inspection and treatment protocols. The Douglas port presents the lowest risk based on the geography of its southern neighboring state, Sonora, Mexico, said USDA. Also in its favor is a long history of collaboration between AHPIS and Sonora on animal health issues.
Keeping a close eye on movement of animals across the border, the U.S. is only admitting cattle and bison that were born and raised in Sonora or Chihuahua, or that were treated according to cattle and bison NWS protocol when entering states eligible for import, said USDA. Reopening the Del Rio and Colombia Bridge ports will be contingent on Coahuila and Nuevo Leon adopting the same NWS protocols for cattle and bison as those now required of Sonora and Chihuahua for cattle or bison entering those states, said USDA.
MEAT GROUPS SUPPORT POLICY BILL
LEADING trade groups that represent the U.S. meat and poultry sectors threw their support behind the passage of the Senate version of the domestic policy bill, also known as the One Big Beautiful Bill Act. The Senate version then went to the House of Representative, where it passed Thursday in a narrow vote. The final vote came after the House voted 219-213 to advance the bill. The reason for the trade groups’ support was that the bill contains numerous provision that are favorable to ranching and farming. As Beef Central noted last week, the Trump administration has been at pains to demonstrate how the bill benefits the farming sector. Trump has repeatedly shown public support for farming and the industry’s peak body (the National Cattlemen’s Beef Assn) has welcomed the latest bill, it said.
The Senate version of the One Big Beautiful Bill protects family farmers and ranchers across the country from a massive tax hike at the end of the year, said Ethan Lane, NCBA senior vice president of government affairs. It also increases the Death Tax exemption, makes the Section 199A tax deduction permanent, increases the Section 179 tax deduction, funds foreign animal disease prevention programs and delivers so many more wins for cattle producers, he said.
The Senate version of the bill also does not include controversial provisions that have gained national attention, said Lane. The bill does not include any sale of public lands and it does not include controversial language on eminent domain. NCBA’s grassroots policy supports landowners’ private property rights and it opposes the expanded use of eminent domain, he said.
The Meat Institute lauded the bill’s passage and what it would do for its members. Its members are very appreciative of the tax relief and the certainty the bill provides businesses, Julie Anna Potts, president of the Meat Institute, told Meat+Poultry in a statement.
NPPC Explains Key Parts Of Bill
The National Pork Producers Council (NPPC) explained some of the key pieces of the bill that would benefit pork producers. NPPC appreciates the efforts of Agriculture Chair John Boozman and other Senate leadership to ensure key animal health provisions were included in the bill, along with tax and other measures important to agriculture, said NPPC president Duane Stateler. Foreign animal diseases (FADs) threaten not only the livelihoods of pork producers but also the food supply chain at large. NPPC thanks congressional leaders for these important steps to help keep pork supplies safe, secure and affordable for American families, he said.
The Senate legislation funds programs that are designed to help with various FAD initiatives, said NPPC. These include: $10M per year for the National Animal Health Laboratory Network (NAHLN); $70M per year for the National Animal Disease Preparedness and Response Program (NADPRP); $153M per year for the National Animal Vaccine and Veterinary Countermeasures Bank (NAVVCB).
Part of the package includes extending key portions of President Trump’s 2017 Tax Cuts and Jobs Act (TCJA), which were going to expire or be phased out by the end of 2025, said NPPC. Some of the provisions that agriculture was closely examining were related to bonus depreciation, estate tax exemptions, Section 179 expensing and the qualified business income deduction, it said.
The National Chicken Council (NCC) provided insights into what the legislation would do for the poultry industry. Exports are an increasingly important component for America’s broiler producers and NCC supports increased funding for Market Access and Foreign Market Development programs that help NCC promote U.S. chicken products and expand export markets, said NCC spokesperson Tom Super. Domestically, NCC also backs the creation of a pilot program for contract poultry growers that would allow them access to an index-based insurance policy protecting against extreme weather-related risk resulting in increased utility costs. NCC said it urged for final passage of the bill.
WALMART OPENS FIRST CASE-READY PLANT
WALMART opens its first-ever owned and operated case-ready beef plant. Based in Olathe, Kan., the more than 300,000 square foot facility expects to generate 600 new jobs in the area. The plant will process fresh beef from the new Sustainable Beef plant in North Platte, Neb., into Angus case-ready cuts, packaged and ready for retail. The cuts will then be shipped directly to Walmart distribution centers serving the Midwest. Walmart entered the case-ready meat business in 2000. Until now, other companies, including Tyson Foods, Cargill and National Beef Packing, have produced case-ready meats for Walmart.
The opening of the new facility in Olathe, Kan., is centered on delivering more of what Walmart’s customers want, affordable food and quality they can trust, said John Laney, executive vice president, Food, Walmart US. This is the first case-ready facility fully owned and operated by Walmart and that milestone ensures it is able to bring more consistency, more transparency and more value to its customers, he said. Walmart first announced plans two years ago to build the facility as part of its commitment to creating a more resilient, transparent and efficient supply chain for Angus beef, says Meat+Poultry.
However, the end goal of forming the company’s own Angus beef supply chain originated even further back, says M+P. In 2019, Walmart began enlisting the help of beef producers and processors to think strategically and holistically about the steps needed to embark on such an in-depth project. Later, in 2022, Walmart made an equity investment in Sustainable Beef, reinforcing the company’s commitment to creating an end-to-end beef supply chain. With majority ownership being local and producer-centric, Sustainable Beef sources its meat from cattle within a 250-mile radius of the plant. Sustainable Beef is excited to see the next step in the vision that was put in place four years ago come to fruition as it partners with Walmart in providing quality Angus beef to Midwest customers, said CEO David Briggs.
TYSON AVERTS AMARILLO STRIKE
TYSON Foods averts a strike at its Amarillo, Texas beef processing plant after reaching a four-year deal between it and members of Teamsters Local 577. The deal includes wage increases, bonuses, expanded benefits and stronger worker protections for more than 3100 union workers at the plant. The workers had earlier voted by a 98% margin to authorize a strike but a negotiation was pending. The workers were demanding higher wages and improved benefits after the union said it had filed several unfair labor practices against Tyson for violating labor laws.
This victory is what Texas Teamsters are all about, coming together as one so they can fight for a better life for themselves and their families, said Al Brito, president of Local 577. Tyson in a statement to Meat+Poultry said it was pleased to have reached an agreement with the Teamsters Local 577 that continues to provide a competitive pay and benefits package for its Amarillo team members. The agreement reflects Tyson’s dedication and continued investment in its team members and the Amarillo community, it said.
The union said the new contract includes a 32% wage increase, more paid time off and expanded retirement benefits. Some wage details include: $4 per hour raises during year one, including retroactive pay back since the expiration of the previous contract; $5 per hour raise for production heavy skills; $4.50 per hour raise for maintenance levels of 7 and up. The union said there would be a $0.50 raise in year two, a $0.70 raise in year three and a $0.90 raise in year four. Ratification bonuses were also noted depending on time in the union: between 90 days and one year, $250; between one year and four years, $500; between five years and 10 years, $750; greater than 10 years, $1,000. Other benefits negotiated between the union and Tyson include enhanced 401 (k) benefits for eligible workers, effective January 1, 2026. Health benefits would also start on the first day of regular employment.