PLANT closures and packers’ determination to maintain positive margins continue to keep weekly cattle slaughter levels at historically low levels. Total slaughter the third week of September was an estimated 529,000 head, versus an actual total of 559,370 head the same week last year. Total slaughter last week was expected to be only 533,000 head after immigration action in south-west Kansas during the week caused a higher rate of absenteeism at beef processing plants. The result was that USDA reduced its estimate for last Tuesday’s slaughter by 5000 head to 100,000 head. Wednesday’s slaughter was 94,000 head and Thursday’s 90,000 head.
The issue is not a lack of market-ready cattle. Total cattle on feed numbers were reported to be 11.163M head on September 1. This was the fifth highest total ever reported for September and 83,000 head above 2025, says Bob Wilson, HedgersEdge.com. But the tally was under the five-year average by 33,000 head and was the fifth lowest level in the past seven years. Front-end fed cattle supplies project to remain above prior year levels by double-digit percentages into the new year, he says. There is also a contra-seasonal increase in these supplies into the fourth quarter. Following the normal spring-early summer high levels and late summer low levels, the rebound in supplies normally should not exceed those spring high levels, he says.
Front-End Will Hit All-Time Highs
In both categories measuring front-end supplies (150 plus days on feed and 180 plus days on feed), the totals this year will reach new all-time high levels in the fourth quarter, says Wilson. The 150 plus day total does not project to drop below 3.5M head until 2027 and the 180 plus day total will remain over 2M head for the fourth quarter. Seasonally, there is a drop in the front-end numbers from the fourth to the first quarter and this looks to be on target again this year, with 150 plus number projected to drop 629,000 head from November to January and the 180 plus number projected to decline 475,000 head from the peak into January. The reductions in each of these categories is in line with the five-year average drop in numbers but the record high levels from which they start will keep supplies high into 2027. The levels in January for the 180 plus day category of cattle projects to be 1.075M head above the five-year average, with the February number 1.180M over the five-year average, he says.
Cash live cattle prices attempted to work their way higher last week after declining slightly the prior week. The 5-area steer price averaged $221.87 per cwt live, down 95 cents from the prior week. The dressed price averaged $350.15 per cwt, down 56 cents. Last Tuesday saw a light trade (2899 head) in Nebraska at $350 per cwt dressed. Wednesday and Thursday saw further light trade in the Corn Belt at similar prices.
Meanwhile, the week before last saw the comprehensive cutout (cuts, grinds and trim) average $379.13 per cwt, up $1.87 per cwt from the prior week. The Choice cutout averaged $376.19 per cwt, up $0.59 per cwt. Spot market sales accounted for 26.3% of the total volume of 6837 loads. Formula sales accounted for 54.6%, forward sales accounted for 18.5% and export sales accounted for 15.0 %. The Choice cutout the first four days last week increased by $4.18 per cwt. Retail activity the weekend before last was limited and fill-in business slowed volumes correspondingly, says Wilson. Expectations for retail beef sales last week were for business to be lackluster, given where the market is on the calendar. Beef cutout values were higher early last week but were expected to face price pressure later in the week, says Wilson.
MARKETINGS AND PLACEMENTS WERE RECORD LOW
AUGUST feedlot marketings and placements were, as expected, each record low for the month. Marketings were a record low level for the third month in a row and September will possibly make it four, says Bob Wilson, HedgersEdge.com. The August total of 1.519M head was 314,000 head under the five-year average. The marketing rate was record low at 17% under the five-year average marketing rate. This equated to a 189,000 head marketing shortfall in August, on top of the 467,000 head combined shortfall in June and July. Accelerating marketings is a difficult task in a situation when the of cost of gain continues to run under the selling price of live cattle. The economic incentive is to add pounds, says Wilson.
Placements during August were record low, making this back-to-back months for new record lows, says Wilson. Placements were down 163,000 head from last year and the reported level of 1.617M head was 377,000 below the five-year average [SK1] placement level. Only Oklahoma posted an increase, up 8%. For the second month in a row, Colorado, Idaho, Nebraska and South Dakota were down double-digit percentages in placements.
Regarding placement weights, all categories saw year-on-year declines. The under 600 lb category saw 35,000 fewer cattle placed than last year (320,000 head). The 600-699 lb category saw 25,000 fewer cattle placed (240,000 head). The 700-799 lb category saw 35,000 fewer cattle placed (355,000 head). The 800-899 lb category saw 33,000 fewer cattle placed (387,000 head). The 900-999 lb category saw 30.000 fewer cattle placed (230,000 head) and the 1000 lbs plus category saw 5000 fewer cattle placed (85,000 head).
The movement of feeder cattle imports from Mexico now the border has reopened has as of yet not been overwhelming, says Wilson. The port of entry at Douglas, Ariz., moved 6500 head north in the first three weeks of operation. The next opening is for a port of entry in New Mexico, just outside of El Paso, Texas. It is a larger facility based on volume, with capacity estimated to have the ability to clear 30-35% of the total numbers moved in 2025. The total imported number of feeder cattle from Canada also remains below 2025 levels. The current year-to-date levels are 25% less than the five-year average, with the latest reported week at the lowest level for a non-holiday week in 16 months, says Wilson.
CME Index Tests Trendline Support
The CME feeder index price is testing trendline support as it approaches the lows made last November, says Wilson. Even without the southern border reopening, the price cycle high for feeder cattle has likely been achieved. The tightest supplies of feeder and stocker cattle are behind the industry. Lower feeder cattle prices can also add to the impetus of holding back some additional stockers (over and above what fell into the ‘intended’ category from the mid-year inventory report), as owners wait for prices to rebound. The reduction in placement levels over the last two months has added some inventory to the feeder cattle supplies outside feedyards, he says. These levels remain under the five-year average but the totals are approaching the trendline shown since 1996. The reduction in beef cow harvest is larger than total cow harvest would show, as dairy cow harvest is higher than last year. Beef cow harvest year-to-date is down 13.5% from 2025, while total cow harvest is down 4.2% Heifer retention has also accelerated since the start of the year. For the latest reported month (July), the combined female harvest percentage was the lowest of any month since 2020, he says.
Choice retail beef prices in August backed away from the new all-time high levels posted the previous month, says Wilson. But the average ground beef price set a new all-time price at $6.92 per lb, 9.5% above a year ago. Retail pork and broiler prices each remain below year ago levels by $0.12 per lb. In looking at substitution by consumers in the protein offerings, retail beef price is often the factor used. More recently, demand erosion for beef and product affordability has ground beef as a more realistic and viable choice of beef product for many consumers. In comparing the alternatives of pork and the composite broiler category of chicken to ground beef, the difference in prices is still stunning. At the start of the century, retail pork prices exceeded ground beef prices. Even as recently as the pandemic, the two items were relatively close to each other in price. Retail ground beef prices now surpass retail pork by more than the premium pork held in 2000, he says.
THIRD QUARTER WILL BE CLOSE TO $230
FED cattle cash prices should finish the third quarter with an average price (basis western Kansas) very close to $230 per cwt live. Prices held initial levels of support during the correction that set in after setting new all-time price highs earlier this spring. But weekly average prices remain at levels below where prices were for the same time frame in 2025, says Bob Wilson, Hedgers.Edge.com. The second half prices for live cattle this year look to average under the corresponding average prices seen in the second half of last year. His current projections have the fourth quarter with the lowest cash cattle prices of 2026, averaging $223 per cwt, he says.
Choice beef cutout values provided disappointment in the recent seasonal gains that occurred, says Wilson. Last year saw the highs for the year made in the Labor Day timeframe, exceeding the spring highs for the year. The three-year seasonal would suggest this was an anomaly. The rally in the late summer left the price $2.50 per cwt under the spring peak for the three-year average. This year the rally stalled $8.25 per cwt under the spring high and $13.40 per cwt under the calendar year high. The seasonal price lows for the fall for the Choice beef cutout tends to be another two weeks out. The current weekly average value is approaching the price support level seen at $365 per cwt. Should this be violated, the next level of support is at $340 per cwt, he says.
For the calendar year thus far, placements have declined 631,000 head from the same timeframe during the previous year, with only two months posting levels above the previous year, says Wilson. Marketings during the same yearly comparison are down 1.064M head. The net is equivalent to an inflow (buildup) of 433,000 head. Examples of this can be found in many states per USDA’s September 1 COF report. For instance, Colorado showed 2% more cattle on feed on September 1 while placing 18% fewer cattle during August. Nebraska also showed an increase of 2% in its COF inventories with a drop of 14% in the August placement level versus last year. This combination confirms the data that front-end supplies will remain at high levels. Given that corn input expenses are 25%-30% higher than at the same timeframe a year ago, the desire to move cattle prior to any severe winter weather is now taking hold with some producers. The cost of gain however still remains well below the selling price for finished cattle, say Wilson.
USDA LOWERS CATTLE PRICE FORECASTS
USDA sharply lowers its forecasts for live cattle and feeder cattle prices for the rest of this year and for 2027. Both slaughter and feeder steers have been trending downward since making their respective annual highs in early May. In August, slaughter steer prices in the 5-area marketing region averaged $228.27 per cwt, about $15 lower than the prices in both July and August 2025, says USDA’s Economic Research Service (ERS). Prices continued to soften in the first week of September, slipping to $219.06 per cwt, about $44 per cwt below the all-time high set in mid-May. With prices trending lower, the forecast for slaughter steer prices is revised down. The third quarter price is reduced by $12 to $230.00 per cwt and the fourth quarter price is lowered by $20 to $225.00 per cwt. Additionally, the 2027 outlook is also lowered to $237.50 per cwt, down $11.75 from last month and roughly steady with 2026, says ERS.
Feeder steers weighing 750–800 lbs at the Oklahoma City National Stockyards in August averaged $346.69 per cwt. This was down nearly $16 from July and about $9 below last year, says ERS. Based on the August 31 price of $332.95 per cwt, values are down $55 or 14% from their early May peak. With recent price movements, expected cattle imports from Mexico and an outlook for higher feed costs, the feeder steer price forecast is lowered $13 to $350.00 per cwt for the third quarter and by $30 to $335.00 for the fourth quarter of 2026. The 2027 price outlook is lowered by $31.25 to $342.25 per cwt. ERS also lowered its forecasts for 2026 and 2027 beef production. The 2026 outlook is lowered by 90M lbs from last month to 24.877 billion lbs. This adjustment reflects a slower-than-expected pace of fed cattle and cow slaughter based on data through September 10, says ERS. In addition, anticipated dressed weights are adjusted in the third and fourth quarters based on the slaughter data. Monthly cattle slaughter has been running at historically low levels. Through August, U.S. slaughter per weekday has been running on average 8000 head fewer per weekday than last year. This aligns with today’s smaller cattle herd and reduced feeder cattle imports from Mexico, says ERS.
ERS Cuts 2027 Production
ERS reduces its 2027 beef production forecast to 24.835 billion lbs, 145M lbs lower than last month’s forecast. Marketings are expected to slow in the second half of 2027 because fewer cattle are now anticipated to be placed in late 2026 and early 2027, says ERS. In addition, higher forecast feed prices are expected to trim carcass weights next year. External forces are putting pressure on cattle markets, contributing to weaker prices. While the recent expansion of quotas allowing for reduced tariffs on imported lean beef trimmings adds to the mix, its direct impact on cattle prices is expected to be limited. That is because other major forces, like tight cattle supplies and less packing capacity, are still the main drivers of the market. Even so, supply fundamentals are expected to support cattle prices and limit declines in the coming year, says ERS.
U.S. beef imports in July were 542M lbs, 19% higher year-over-year, says ERS. Leading the year-over-year increase were imports from Argentina, up nearly 500% compared to last year. The spike in imports from Argentina to 49M lbs, the highest ever monthly import from the country, was due to the opening of the third quarterly tranche of Argentina’s temporarily expanded tariff rate quota (TRQ) on July 1. On February 6, 2026, the Executive Office of the President issued a proclamation increasing the tariff rate quota for Argentina by an additional 80,000 metric tons, to be issued in four quarterly tranches throughout 2026. Argentina filled tranche two in June and, according to the Department of Homeland Security, Customs and Border Protection Weekly Commodity Status Report for September 8, the third tranche was filled as of August 28. The fourth and final tranche of this temporary increase in Argentina’s quota will open on October 1, says ERS.
WH EXPLORES CUTBACK ON IMPORTS
A SMALL group of White House officials is exploring whether to cut back President Donald Trump’s decision to increase foreign beef imports, as GOP panic rises ahead of the midterms. The proposal to reduce the amount of imports is being discussed within the Domestic Policy Council headed by Vince Haley, a longtime Trump speechwriter and former campaign official, and a few other officials at the White House. That is according to two people with direct knowledge of the conversations, who were granted anonymity to share private details with Politico.
Trump officials are unsure if anything will come of the talks, says Politico. The two people said the Office of the U.S. Trade Representative disagrees with cutting back the imports, since it aims to lower high consumer beef prices in the short term and since USTR helped implement the move. But their conversations about partly rolling back the beef policy, which Trump instituted in August, is a clear sign the White House is trying to stem the alarm from battleground and farm-state Republicans as high prices and Trump’s tariffs roil their election campaigns. The White House is also preparing a plan on diesel exports, likely with exemptions, amid sky-high prices from the Iran war, says Politico.
The White House and USTR, in statements after Politico’s story was published, denied there was any official action on the table. There’s no pending policy change to ‘disagree’ with, said a USTR official. The administration is focused on the interest of American ranchers and consumers. All agencies are supporting the President in these goals. The White House is not considering such action, said USTR. As the President directed in his executive order, USDA and USTR continue to monitor beef imports to ensure that savings are being passed onto consumers, said White House spokesperson Kush Desai.
Earlier last week, Iowa Rep Ashley Hinson, the GOP Senate nominee, took the extraordinary step of publicly breaking with Trump, saying gas prices were too high because of the Iran war and that farmers in her state are suffering. Michigan Senate GOP nominee Mike Rogers and other vulnerable House and Senate Republicans have made similar breaks.