THE rebuilding of the U.S. beef herd has scarcely begun, according to USDA’s annual Cattle Inventory report. Beef cows on January 1 totaled 27.607M head, down 1.0% from a year ago Beef replacement heifers on January 1 totaled 4.714M head, up 0.9% from a year ago. The only meaningful year-on-year increase in cattle numbers came in the number of milk cows, which was up 2.0% on a year earlier. All other categories of cattle were flat with 2024 or slightly lower. All cattle and calves as of January 1, 2026 totaled 86.155M head, 99.6% of a year earlier.
Uncertainty around U.S. processing capacity is raising fresh questions about whether large-scale heifer retention is even necessary as the industry looks toward rebuilding the cow herd, says a report from RFD TV News in Lubbock, Texas. Recent plant closures and production cutbacks suggest slaughter capacity may shrink before expansion efforts fully begin. According to analysis from Don Close of Terrain, Tyson Foods’ decision to close its Lexington, Neb., beef plant and reduce production at its Amarillo, Texas, facility has altered the balance between fed cattle supplies and slaughter capacity. With fewer cattle needed by packers, feedyards may be able to meet demand using existing inventories, reducing the need to bid aggressively for feeder cattle, he says.
USDA data continues to show that heifer retention has not meaningfully started, says Close. Heifers on feed remained flat through the third quarter, confirming that producers have not yet shifted toward herd rebuilding. At the same time, years of cow liquidation across both the beef and dairy sectors have left an aging herd with limited replacement depth. Close warns that further reductions in processing capacity could discourage expansion, locking the industry into tighter supplies and slower recovery.
Other Categories Are Flat
As noted, numbers in most cattle categories on January 1 were flat with a year earlier. They included: Steers weighing 500 lbs totaled 15.6M head, down 1% from January 1, 2025: Bulls weighing 500 lbs and over totaled 2.01M head, up slightly: Calves under 500 lbs totaled 13.3M head, down slightly: Cattle and calves on feed for the slaughter market for all feedlots totaled 13.8M head: The inventory was down 3% from the January 1, 2025 total of 14.3M head: Cattle on feed in feedlots with capacity of 1000 head or more accounted for 82.7% of the COF total on January 1, up slightly from the previous year. The combined total of calves under 500 lbs and other heifers and steers over 500 lbs outside feedlots, at 24.5M head, was 1% above January 1, 2025. The 2025 calf crop was estimated at 32.9M head, down 2% from the previous year’s calf crop. Calves born during the first half of 2025 were estimated at 24.2M head, down 2% from the first half of 2024. Calves born during the second half of 2025 were estimated at 8.70M head, 26% of the total 2025 calf crop.
Tight cattle supplies caused Tyson Foods’ beef segment to have an operating loss of $319M in Tyson’s 2026 first quarter ended December 27, compared to a $26M operating loss in the 2025 first quarter. Tight feedlot supplies also helped cash live cattle price surge the Friday before last. Live prices averaged $239.44 per cwt, while dressed prices averaged $376.16 per cwt. These were up $4.74 per cwt and $7.36 per cwt, respectively, from the prior week They were the highest weekly prices since the first week of September last year. Little cash trade took place the first three days of last week. Thursday morning saw a light trade up north at $237-238 per cwt live or at $378 per cwt dressed.
BEEF EXPORTS FALL BACK IN NOVEMBER
NOVEMBER beef exports took a step back after a rebound the month before, falling 19% from a year ago to 88,139 metric tons (mt). Export value was down 16% to $736.7M million. The decline was driven primarily by China, where exports remain minimal due to China’s failure to renew registrations for U.S. beef plants and other market-closing factors, says the U.S. Meat Export Federation (USMEF). But beef exports also trended lower year-over-year to South Korea, Mexico, Canada and Taiwan. November exports increased year-over-year to Indonesia, Chile, the United Arab Emirates (UAE), Singapore and Colombia, and were fairly steady to Japan.
For January through November, beef exports totaled 1.04M mt, down 12% from the same period in 2024. Export value was $8.52 billion, down 11%. But when excluding China from these results, exports were down 3% year-over-year in volume and were just 1% lower in value. With each day U.S. beef is locked out of the world’s largest import market, the U.S. industry misses out on millions of dollars and its competitors reap the benefits, says USMEF president and CEO Dan Halstrom said. It’s also frustrating that this impasse overshadows the fact that global demand for U.S. beef remains resilient even in the face of tight supplies.
Exports of U.S. pork remained relatively strong in November but were below the large total reported in November 2024. Exports totaled 254,085 mt, down 7% from a year ago but the third largest of 2025. Exports were valued at $720.8M, down 8% year-over-year but also the third highest of 2025. November exports increased year-over-year to Mexico, South Korea and the Dominican Republic and were record large to Guatemala. But these results were offset by lower shipments to China, Japan, Canada and Colombia.
For January through November, pork exports totaled 2.68M mt, down 3% from the record pace of 2024, while value also fell 3% to $7.65 billion. With most of this decline due to lower variety meat shipments to China, where U.S. pork faces retaliatory duties, January-November exports of pork muscle cuts were just 1% below 2024’s record pace in both volume (2.19M mt) and value ($6.57 billion), says USMEF. The pork export numbers continue to be impressive, with broad-based growth mostly offsetting the obstacles in China, says Halstrom. It was especially gratifying to see per head export value topping $70 in November, which is excellent news for U.S. producers and for the entire pork supply chain, he says.
Beef Exports Were Lower To Most Major Markets
January-November beef exports to leading value market Korea remained slightly ahead of the 2024 pace, says USMEF. November exports declined 20% to 17,258 mt, valued at $176.2M (down 15%). Through the first 11 months of 2025, exports were 1% higher in both volume (211,665 mt) and value ($2.02 billion), topping the $2 billion mark for the fifth consecutive year. November beef exports to Japan were nearly steady with a year ago at 18,108 mt (down 1%), while value slipped 5% to $138.5M. Beef variety meat shipments to Japan, mostly tongues and skirts, were a bright spot at 5495 mt, up 81% from a year ago, while value climbed 59% to $47.6M. January-November exports to Japan (muscle cuts plus variety meats) were down 2% from a year ago in volume (219,329 mt) and were 6% lower in value ($1.62 billion).
November beef exports to Mexico totaled 16,390 mt, down 13% from a year ago, while value fell 4% to $102.7M, says USMEF. January-November exports followed a similar trend, declining 11% from a year ago to 189,276 mt, while value was down 4% to $1.18 billion. These results included 103,459 mt of beef variety meat valued at $287.6M, as Mexico is the largest volume destination for U.S. beef variety meat.
Led by a rebound in Indonesia, where non-tariff barriers have plagued U.S. beef, November exports to the ASEAN region totaled 4718 mt, up 23% from a year ago, while value increased 26% to $33.4M. Through November, exports to the region were still down 18% in volume (32,574 mt) and 23% in value ($249.5M). Prospects for growth going forward will depend largely on policy decisions by the Indonesian government, which has pledged to make substantial improvements in market access for U.S. beef but still maintains many complex import restrictions, says USMEF.
Industry Rebuilds In UAE
The U.S. beef industry continues to rebuild market share in the UAE, where exports had faced restrictions for several months due to halal-related issues, says USMEF. November exports to the UAE totaled 546 mt, up dramatically from the minimal year earlier volume, and were valued at $5.7M. Prior to the recent impasse, however, it was not unusual for exports to the UAE to reach $8M to $9M in a single month. The November results pushed January-November exports to the UAE 2% above a year ago in volume (4432 mt) and 9% higher in value ($59.2M).
Rebuilding market share is also a priority in Colombia, where access for U.S. beef was restricted through much of 2024 due to avian influenza in dairy cows, says USMEF. November exports totaled 371 mt, up 9% from a year ago, while value soared 55% to $4.1M. For January through November, exports to Colombia increased 24% in volume (3863 mt) and climbed 76% in value ($36.9M) compared to the same period in 2024.
November beef exports to Chile were the largest since March at 806 mt, up 17% from a year ago. Export value was $7.49M, up 12% and the highest since April 2022. Through November, exports to Chile were up 23% year-over-year in volume (6726 mt) and were 39% higher in value ($57M). U.S. beef is differentiated at retail in Chile and is sought after as a high quality option, says USMEF. A wide range of U.S. cuts are available, including outside skirts, inside skirts, coulottes, chuck flaps, flank steaks, ribeyes, round heel muscles and short ribs.
Although November beef exports to Central America were significantly lower than a year ago in volume (1434 mt, down 34%), export value remained steady at $15.3M, says USMEF. Through November, beef exports to the region already set an annual value record of $187.3M, up 27% from a year ago, despite a 4% decline in volume (19,309 mt). Beef shipments to China were relatively strong in the first quarter of 2025, says USMEF. But U.S. beef has since lost access to the market when China allowed plant registrations to expire in mid-March and in the following months. China also suspended 20 facilities in the June-December period and has created a complicated market closure. January-November exports to China were down 64% to 58,366 mt, valued at $493.4M (down 66%).
November beef export value equated to $408.91 per head of fed slaughter, down 5% from a year ago, says USMEF. The January-November average was $391.82, also down 5%. Exports accounted for 12.7% of total November beef production and 10% of beef muscle cuts, down from 14.4% and 11.8%, respectively, in November 2024. The January-November ratios were 12.8% of total production and 10.5% for muscle cuts, each down one percentage point from the same period in 2024. The loss of the China market is also reflected in the lower dollars per head and the smaller share of production being exported, says USMEF.
BEEF CUTOUTS INCREASE
THE daily and weekly boxed beef cutouts increase but by nowhere near enough to cover higher live cattle costs. The comprehensive the week before last averaged $366.55 per cwt, up $4.37 per cwt on the prior week. The Choice cutout the first four days of last week gained $1.69 per cwt. When reviewing the components that aggregate into the composite cutout, a couple of items are noted says Bob Wilson, HedgersEdge.com. The premium commanded by Prime over Choice beef has narrowed significantly compared to the same time period to start 2025. From a premium of more than $62 per cwt, the premium currently is $17.45 per cwt.
Also seen is the tightening or narrowing of the premium that Choice has over Select product, from a premium at the start of 2025 of not quite $30 per cwt to the level last week of $3.39 per cwt. Both supply and demand is at play in these changes, he says. The front-end loading of the marketable cattle supplies has increased the supply for Prime product, with total loads reported for January 2026 up 17.75% from January 2025. On the demand side, beef sales at retail since this past summer have reported a marked trend by consumers across all income levels of dumbing down their purchases, says Wilson.
HEAVY BEEF LOSSES CONTINUE FOR TYSON
TYSON Foods’ beef segment continuesto suffer heavy losses. It had an operating loss of a record $1.135 billion in fiscal 2025 or an adjusted operating loss of $426M. Its fiscal 2026 first quarter ended December 27 saw an operating loss of $319M, compared to a $26M operating loss last year in the same quarter. Tyson says its beef business could lose up to $500M on an adjusted basis this year as the supply of cattle hits a 75-year low, and it forecasts a loss of at least $250M.
Tyson’s beef sales in the quarter increased to $5.771 billion, compared to $5.335 billion in the first quarter of 2025, up 8.15%. Sales volume was down 7.3% but the average sales price was up 17.2% on a year earlier. Continuing to absorb losses like Tyson has been seeing for the past two years is simply unacceptable, says president and CEO Donnie King. Looking forward, Tyson expects cattle supplies to remain tight throughout 2026 and 2027. During this period, chicken is likely to continue to benefit most from the changing consumer preferences, both at retail and in foodservice, and Tyson is obviously well positioned to win, he says. (This showed up in Tyson’s chicken operating income of $450M in the first quarter, versus $460M a year earlier).
Tyson in its beef segment remains focused on the factors within its control as it navigates a challenging and dynamic market environment, CFO Devin Cole told analysts. Beef sales increased, reflecting continued healthy consumer demand. Tyson’s announced changes to right-size its beef business were completed after the close of the first quarter. Both moves are in response to the ongoing challenges of a tighter U.S. cattle supply. Tyson believes these moves align it to compete more effectively this year and over the long-term with a smaller production footprint and a higher capacity utilization. It expects to benefit in coming quarters from the effect of the actions taken, he said. Segment operating income declined compared to the prior year as higher cattle costs more than offset higher cutout values and continued high consumer demand. While navigating the headwinds, Tyson remains committed to the elements it can control, like optimizing its operational footprint, as well as seeking out alternatives to improve its long-term results, he said.
Revenues Were Up 5.1%
Tyson’s total revenues for the first quarter were $14.31 billion, up 5.1% from $13.623 billion recorded the prior year. For the first quarter, net income attributable to Tyson was $85M or 24 cents per diluted share, down from $359M or $1.01 per diluted share. GAAP operating income was $302M, down 48% from the prior year at $580M. Adjusted operating income was $572M, down 13% from a year ago, which was $659M.
Tyson’s first quarter results reflect solid execution across its portfolio, said King. Prepared Foods delivered top- and bottom-line growth, while Chicken reported its fifth consecutive quarter of year-over-year volume gains. As protein demand continues to increase, Tyson’s consistent share gains demonstrate it is well-positioned to capture this momentum. He is encouraged by the progress Tyson has made and confident it will drive continued improvement across the controllable aspects of its business in fiscal 2026, he told analysts.
Tyson’s Chicken business in the quarter had $4.221 billion in sales, up from $4.065 billion a year earlier. Operating income was $450M, down 2.1% from last year, which was $460M. Volume in the segment increased by 3.7%, while the average sales price declined 0.1%. The company’s Pork business saw a slight dip in sales for the quarter to $1.609 billion, compared with last year’s $1.617 billion. Volume in the Pork sector increased 1.6%, while prices dipped 1.6%. Operating income was $50M, compared to $73M in the same quarter of 2025. For fiscal 2026, Tyson anticipates adjusted Pork segment operating income from $250M to $300M. Tyson’s Prepared Foods business unit reported $2.673 billion in sales for first quarter, up from $2.473 billion in the prior year. Segment operating income was $322M for the quarter compared to $297M a year earlier. Its International segment had sales of $582M, versus $584M in 21025, and operating income of $41M, the same as in 2025.