THE beef industry will be looking for a rally in live cattle and wholesale beef prices now that the Thanksgiving holiday is behind it. Turkeys have been the main retail feature item for several weeks but retailers can now put all their focus on beef rib roasts and, to a lesser extent, on holiday hams. The markets will need a boost as the beef cutouts and especially live cattle prices declined sharply the week before last. Cattle prices tumbled again last week to their lowest level since last March.
Cash live cattle prices declined sharply the week before last. They averaged $217.41 per cwt live or $343.36 per cwt dressed. These were down $7.65 per cwt and $7.58 per cwt, respectively, from the prior week. Prices last week were expected to be lower as the markets, especially up north, absorbed the announcement of the closure of the Tyson Foods’ beef plant in Lexington, Neb. The closure is currently scheduled for January 20 (as CBW reports in its third story). Trade last week was extremely light up north on Monday, with 943 head selling at $207-208 per cwt live. Tuesday saw a fairly active trade up north, with prices in Iowa averaging $208.68 per cwt live or $329 per cwt dressed. Prices in Nebraska averaged $209.54 per cwt live or $329.45 per cwt dressed. Prices down south averaged $215 per cwt live, with the only trade of note being in Texas.
Meanwhile, the comprehensive cutout the week before last averaged $371.92 per cwt, down $3.11 per cwt from the week before. The Choice cutout averaged $369.17, down $2.61 per cwt, while the Select cutout averaged $352.96 per cwt, down $5.74 per cwt. Formula-priced sales accounted for 49.8% of the total volume of 7493 loads. Spot market sales accounted for 28.0%, forward sales accounted for 22.2%, their largest percentage in many weeks, and export sales accounted for 19.0%, also their largest for some time. The Choice cutout the first three days of last week declined by $3.20 per cwt to $368.28 per cwt.
Holiday Kill Was Small
Analyst Andrew Gottschalk, HedgersEdge.com, expected the total harvest in last week’s holiday-shortened week to challenge 500,000 head. Packer margins have turned positive (just over $80 per head on Wednesday), as cutout values benefit from the projected reductions in production schedules last week, seasonal gains from the holidays and with lower inputs from declining cash live cattle prices, he says. The export activity lived up to the expected seasonal push that the market tends to see for the week prior to the Thanksgiving holiday and was reported at 1425 loads. That said, beef cutout values continue to hover between price support and price resistance. With expected lower cash cattle purchases, beef cutout values may actually soften with packers competing to pick up customers from the plant closure and expand their own market share. Much is yet to be determined, at a time when turkeys were front and center for consumers, he says.
JBS ADDS TO LEATHER ASSETS
PROTEIN giant JBS SA signs a binding memorandum of understanding with the shareholders of Viva to combine both firms’ assets related to leather production and commercialization. In a securities filing, JBS said the new company will be called JBS VIVA and will be owned 50% by JBS and 50% by Viva’s shareholders, Vanz Holding and Viposa. JBS VIVA will be the global leader in this segment, processing more than 20M hides per year, with 31 factories and more than 11,000 employees distributed across Brazil, Italy, Uruguay, Argentina, Mexico, and Vietnam, says JBS.
THE U.S. beef processing sector will continue to suffer from over-capacity even after Tyson Foods closes its Lexington, Neb., plant on January 20 and reduces its Amarillo, Texas plant to a single full capacity shift. These actions will remove 7700 head of maximum daily slaughter capacity, as the Lexington plant has a capacity of 4800 head per day and the Amarillo plant has a capacity of 5800 head per day. However, CBW data shows that the largest 76 plants in the U.S. in late 2024 (from 7000 head per day down to 20 head per day) had a total capacity of 135,480 head per day.
Two new plants began operations this year. They included America’s Heartland Packing in Wright City, Mo., and Sustainable Beef in North Platte, Neb. These added 2400 head per day and 1500 head per day, respectively, although they are currently operating far below these levels. Subtracting the Tyson plants’ capacity changes from the 76-plant total means a total of 127,780 head. Adding the full capacities of the two new plants means a new total of 131,680 head in 77 plants.
Tyson’s announcement on November 21 took many by surprise, as most observers believed the four major beef processors would “tough it out” until cattle supplies began to increase. But Tyson’s actions seem to indicate that it believes any meaningful increase in numbers won’t occur for several years. Secondly, it appears focused on improving capacity utilization at its Amarillo and its four other plants (Dakota City, Neb., Finney Country, Kan., Joslinn, Ill., and Pasco, Wash.). To meet customer demand, production will be increased at other company beef facilities, optimizing volumes across its network, said Tyson in a statement. Tyson Foods recognizes the impact these decisions have on team members and the communities where it operates. It is committed to supporting workers through this transition, including helping them apply for open positions at other facilities and providing relocation benefits. The Lexington plant employs nearly 3200 people. The transition in Amarillo is expected to impact 1700 workers.
Tyson Had Huge Annual Loss
Weighing on Tyson’s mind likely was the beef segment’s operating income loss of $426M in fiscal 2025. This was a record annual loss and went against a $381M loss in fiscal 2024. Tyson also said it paid $1.840 billion more for cattle in 2025 than in 2024. Its five-plant capacity after the changes are made will be 18,100 head per day. This would put it fourth in capacity terms behind Cargill Protein whose current capacity is 23,000 head in six plants. JBS would remain No.1 with 29,000 head of daily capacity in nine plants. After Tyson bought the former ibp, it closed four plants from 2006 to 2009.
The announced closure of the Tyson plant in Lexington will impact producer leverage, says Andrew Gottschalk, HedgersEdge.com. However, in the short term, the excess slaughter capacity in the industry should be able to absorb these cattle into other plants. The greater concern arises when cattle inventories expand, and they will, he says. Jeff Stolle, Nebraska Cattlemen’s Assn director of marketing, predicts the Lexington plant closure will reduce Nebraska’s cattle harvest capacity by 15%. The plant has been a valuable and consistent piece of the packer processor infrastructure in the state for 35 years and to lose this amount of harvest capacity on a daily basis is definitely going to be a challenge, he says. The announcement is a shock as Stolle says there are significant feedyard expansion projects in the works. He hopes there’s a future opportunity to bring the Lexington facility online with different ownership, he says.
Don Close, Terrain senior animal protein analyst, says the announcement comes following a rough year for the meatpacking industry and says a plant closing has been a possibility for the last 18 months.Fed beef packers have been losing an average of $200 per head. Margins have certainly improved over the last two or three weeks but it has been a tough year and he doesn’t know that the sector is near the end of this yet, he says. Elliott Dennis, University of Nebraska-Lincoln livestock and meat economist, predicts Tyson targeted its least efficient plant for closure to maximize profitability across its operations, highlighting the importance of operational efficiency in the beef industry.
Closure Will Have Immediate Price Impact
The Lexington plant closure will have immediate short-term effects on cattle prices, says Dennis. Drawing parallels with Tyson’s 2019 Finney County, Kan., plant fire, he predicts prices potentially falling and taking months to recover. Back in 2019, it took prices about five to six weeks to find a bottom on the live cattle market. From the time the industry had the announcement of the fire, prices ended up going down about 12% from where they were pre-fire and it took almost three and a half months to get back to pre-fire prices. Finished cattle will redistribute to other regional plants and the impact will be more about change in value proposition and logistics for producers than the ability to find a buyer, he says.
The Tyson announcement reduces capacity in the industry but does not solve the problem of overcapacity, says Derrell Peel of Oklahoma State University. This will reduce industry slaughter capacity by roughly 7000 to 8000 head per day. The exact impact will depend on forthcoming details, especially how Tyson will manage a one-shift plant. Depending on the details, the reduction represents roughly 7.5 to 9% of total industry slaughter capacity. Monday to Friday daily fed slaughter thus far in 2025 has averaged 90,529 head per day, down 3.6% from the recent peak of 93,931 head per day in 2022. However, Saturday slaughter has averaged 4878 head this year, just 13.1% of the 37,137 head per day average in 2022, he says.
For the first 45 weeks of the year, total weekly fed slaughter averaged 457,524 head compared to 506,793 head per week in 2022, a decrease of 9.7%, says Peel. The Tyson planned reduction in packing capacity might be nearly but not quite enough to balance the decrease in cattle slaughter since the peak in 2022. However, fed cattle slaughter is expected to continue to decrease in 2026 and 2027. Excess packing capacity will continue to be an issue for beef packers for the foreseeable future, he says.
OCT MARKETINGS WERE THIRD LOWEST
OCTOBER feedlot marketings were the third lowest on record for the month. They totaled 1.697M head, 92.0% of a year ago. This low was exceeded only during the previous cycle lows seen during 2014 & 2015. Placements in October were record low for the month at 2.039M head, which was 90.0% of last year. The November 1 COF total of 11.706M head was 97.8% of a year ago and was 260,000 head lower than a year ago. The report also included some data for the prior month.
Six states, Idaho up 5%, Iowa up 4%, Kansas up 2%, Nebraska up 2%, South Dakota up 4% and Washington up 9%, had more cattle on feed than a year ago. Nebraska had the most cattle on feed with 2.640M head, with its total up 60,000 head from a year ago. Texas was second with 2.630M head, down 250,000 head, and Kansas was third with 2.460M head, up 50,000 head. Three states placed more cattle in October than last year. California placed 9% more, Idaho placed 6% more and Iowa placed 1% more. Only Iowa (up 1%) and Oklahoma (up 2%) marketed more cattle in October than last year.
Regarding placement weights, all categories except the heaviest saw year-on-year declines. The under 600 lb category saw 65,000 fewer cattle placed than last year (515,000 head). The 600-699 lb category saw 60,000 fewer cattle placed (420,000 head). The 700-799 lb category saw 40,000 fewer cattle placed (445,000 head). The 800-899 lb category saw 47,000 fewer placed (384,000 head). The 900-999 lb category saw 15,000 fewer cattle placed (195,000 head) and the 1000 lbs plus category saw the same number placed (80,000 head).
The COF total remains approximately 1.0M head above the low levels made at the lows of the previous cycle during 2013-2014, says Andrew Gottschalk, HedgersEdge.com. Front-end supplies currently project to remain above prior year levels into the second quarter of 2026. However, the amount of this increase above the prior year level projects to narrow going forward, compared to year-over-year, provided orderly marketings are achieved. The reduction in monthly placements which began during the second quarter of this year, is expected to continue into the New Year. This action should lead to a dwindling supply of front-end cattle versus 2025 throughout the first half of next year, he says.
BEEF EXPORTS REMAIN FAR BELOW LAST YEAR
BEEF exports in August were sharply lower than a year ago, impacted heavily by the impasse with China that has effectively locked U.S. beef out of the world’s largest import market. But August data showed a relatively strong performance for U.S. pork exports and an uptick in shipments of U.S. lamb cuts. USDA just released August red meat export data, which was delayed due to the lengthy government shutdown. The data was compiled by the U.S. Meat Export Federation (USMEF).
August pork exports totaled 236,311 metric tons (mt), down 1% from a year ago, valued at $685.9M (down 2%), says USMEF. August exports were bolstered by another remarkable performance by leading market Mexico, where shipments climbed 8% from a year ago to 102,790 mt, the fifth largest monthly volume on record. Export value reached $252.3M, up 9% and the second highest on record, trailing only December 2024. For January through August, total pork exports were 3% below last year’s record pace in both volume (1.93M mt) and value ($5.48 billion).
August beef exports totaled 83,388 mt, down 19% from a year ago and the lowest since June 2020, says USMEF. Export value fell 18% to $695.5M, the lowest since February 2021. While exports to China plummeted, shipments were fairly steady to leading market South Korea and trended higher than a year ago to the Caribbean and Central and South America. For January through August, beef exports were 9.5% below last year at 775,188 mt, while value declined 9% to $6.37 billion.
August saw some bright spots for beef but the impasse with China weighs heavily on exports, says USMEF. With U.S. beef facing a multi-layered lockout in China, export results have worsened throughout 2025 as supplies of eligible product were depleted and more plants were suspended in June and August. Exports sank to just 862 mt in August, down 94% from a year ago. For January through August, exports to China were 52% below last year in volume (56,494 mt) and 53% lower in value ($484.2M). The accumulated decline in exports for January through October is estimated at $832M, as September and October exports are also certain to be minimal, says USMEF.
As USMEF has previously reported, China has failed to renew registrations for the vast majority of U.S. beef plants and cold storage facilities, it says. But renewing these registrations is just one of the steps necessary to restore access for U.S. beef in China, where 16 U.S. plants have been suspended since June and 30 facilities have been suspended since 2022. For China to return to its commitments under the U.S.-China Phase One Agreement, it must address all of the barriers obstructing access for U.S. beef, says USMEF.
August beef exports to leading market South Korea were slightly below last year in volume, falling 1.5% to 16,823 mt, says USMEF. But export value still increased 3% to $168M. For January through August, exports to Korea increased 8% from a year ago in volume (162,907 mt) and increased 9% in value ($1.55 billion). Beef exports to Central America posted another strong performance in August, climbing 5% from a year ago to 1512 mt, while value soared 50% to $17M. Led by robust growth in Guatemala and Costa Rica, January-August beef exports to the region are on a record pace, reaching 14,520 mt, up 6% from a year ago, while value climbed 34% to $134.2M.
Among other markets, August beef exports trended higher than a year ago to the Caribbean region, led by growth in the Dominican Republic, Bahamas and Jamaica, and to South America, led by growth in Chile (where exports have been above year-ago levels in each of the past six months) and a rebound in Colombia. Exports were also higher to Hong Kong, the Philippines, Vietnam, Europe and Morocco but trended lower to Japan, Mexico, Canada, Taiwan and the Middle East. Beef export value equated to $372.10 per head of fed slaughter in August, down 5% from a year ago. The January-August average was $400.16 per head, down 3.5%.