CASH live cattle prices continue to confound all expectations. They soared the week before last to new record highs and might do so for several more weeks. Analysts are wary about forecasting when and where prices might top out. Market-ready cattle supplies remain in extremely tight hands and cattle feeders are likely to control the supply for the rest of the year. The only factors that could derail further price advances are a sudden erosion in beef demand or an animal disease crisis that would impact beef exports.
The week before last saw USDA’s 5-area steer price average $244.25 per cwt live or $386.16 per cwt dressed. The live price was up $1.44 per cwt from the previous week’s record price. The dressed price of $386.17 per cwt was up $3.39 per cwt from the prior week. It topped the prior record of $383.68 per cwt set the week ended August 3. Both price averages were far above the same week last year. The live average was up 31.6% and the dressed average was up 31.4%. The cash trade last week was again slow to develop. The only sales through Wednesday were in Iowa-Minnesota at $242-245 per cwt live and in Kansas at $240-242 per cwt live. A more active trade began Thursday morning, notably in Kansas at close to $242 per cwt live.
Comprehensive Cutout Also Surges
Meanwhile, the national boxed beef comprehensive cutout (cuts, grinds and trim) the week before last surged to its highest weekly level of the year. It averaged $393.98 per cwt, up $14.47 per cwt from the prior week. This surpassed the previous high of $388.64 per cwt set the week of July 4. The Choice cutout averaged $392.87 per cwt, up $12.87 per cwt, while the Select cutout averaged $369.48, up $13.42 per cwt. Formula-priced sales accounted for 60.1% of the total volume of 6368 loads. Spot market sales accounted for 25.0%, forward sales accounted for 14.8% and export sales accounted for 11.8%. Boosted by last-minute Labor Day sales, the Choice cutout the first four days of last week increased by $6.50 per cwt to $414.41 per cwt and the Select cutout increased by $2.18 per cwt to $385.84 per cwt. The four-day volume however was light at 296 loads of cuts.
Carcass weights in the latest reported week ended August 16 remained above year ago levels. Steer weights averaged 943 lbs, up 4 lbs on the prior week and up 12 lbs on the same week last year. Heifer weights averaged 857 lbs, up 1 lb from the week before and up 17 lbs from last year. Overall weights averaged 866 lbs, flat with the week before but up 14 lbs from last year. This was the equivalent of adding 8805 head to that week’s slaughter total, says HedgersEdge.com. The total of 535,913 head was the smallest regular week kill of the year. 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 August 16 was 84.24%.
Positive economic news is important in that the challenge going forward will be maintaining positive demand for beef, says Andrew Gottschalk, HedgersEdge.com. On the economic front, manufacturing in the U.S. has attained a three-year high. The S&P Global US Manufacturing PMI rose to 53.3 in August from 49.8 in July. This was well above market expectations of 49.5. The latest reading signaled a renewed improvement of factory business conditions after a brief deterioration in July. The reading for August was the highest since May 2022. Production rose for a third successive month, rising at a pace also not recorded since May 2022. To date, demand for beef has stayed very positive. But consumers are fickle and could alter their purchase patterns at some point with little warning. Therein lies the risk to beef and cattle prices going forward, he says.
AUG 1 COF TOTAL IS SMALLEST SINCE 2017
THE August 1 Cattle on Feed (COF) total of 10.992 M head was not just down 1.6% on last year, it was the smallest total for the date since 2017. This was mainly because July placements at 1.598M head were down 6.1% from a year ago and July marketings at 1.749M head were down 5.7% from last year. Analysts regarded the COF report as neutral. July feedlot placements were 2.7% higher than their average forecast and were the lowest for July since 2016. July marketings were 0.2% higher than forecast. This was the second lowest July marketings since 2016. This meant the August 1 COF total was 0.3% higher than forecast and was 103,000 head lower than a year ago.
Five states, Idaho up 5%, Iowa up 6%, Kansas up 3%, Nebraska up 3% and Washington up 6%, had more cattle on feed than a year ago. Texas had the most cattle on feed with 2.490M head, with its total down 250,000 head from a year ago. Nebraska was second with 2.390M head, up 70,000 head, and Kansas was third with 2.270M head, up 60,000 head. Six states placed more cattle in July than last year. Arizona placed 6% more, California 18% more, Idaho 19% more, Iowa 18% more, Kansas 2% more and South Dakota 5% more. Four states marketed more cattle in July than last year. California marketed 16% more, Iowa 18% more, Oklahoma 14% more and South Dakota 3% more.
Regarding placement weights, all categories except the heaviest saw year-on-year declines. The under 600 lb category saw 60,000 fewer cattle placed than last year (340,000 head). The 600-699 lb category saw 20,000 fewer cattle placed (245,000 head). The 700-799 lb category saw 20,000 fewer cattle placed (365,000 head). The 800-899 lb category saw 9000 fewer placed (378,000 head). The 900-999 lb category saw 5000 fewer cattle placed (195,000 head) and the 1000 lbs plus category saw the same number placed (75,000 head).
Front-End Will Remain into February
Front-end fed cattle supplies (those on feed 150 days or more) project to remain above prior year levels until at least February 2026, says Andrew Gottschalk, HedgersEdge.com. There is some unfavorable news and some good news in the manner in which this supply is projected to flow during the September-February period. For the less desirable news, this supply of cattle on feed September 1 is projected to stay above year ago levels until January 1 before trending below the prior year into February. Provided that the estimated marketing levels are achieved, the industry should enter the late-winter/spring period in a positive marketable supply condition. This would be the first estimated year-over-year decline in this category of cattle since February of this year. This result is due primarily to the decline in second quarter placements and the expected sharp decline in third quarter placements during this year, he says.
Live cattle prices continue to defy gravity with their relentless advance to record new highs, says Gottschalk. When will this rate of advance slow or begin to decline? During the 2013-2015 cycle, the monthly and annual average price highs were made in 2014. The highest monthly average for that cycle occurred in November 2014. However, the annual beef production cycle low was not made until 2015, the year following the cyclical price high for fed cattle. This price action should serve as a reminder that markets and/or prices are anticipatory. This advance will prove no different, he says.
Meanwhile, cattle on feed numbers in Australia continue to surge to record highs, says Jon Condon of Beef Central. They are now within sight of 1.6M head based on results from the June quarterly feedlot survey just released. The upwards trajectory to new record highs is consistent across all feeding states expect South Australia, where numbers have fallen seasonally since December. Nationally, the June quarter results saw 1.579M head on feed, while feedlot capacity also hit new highs at 1.706M head. Also reflecting the current level of grain-fed activity was feedlot utilization, where yards last quarter operated at 92.55% of capacity. That figure was up from 90% the previous quarter and 86.6% in the June quarter last year. On a state basis, Queensland feedlot utilization sat at a record 93% at the end of June, while New South Wales was at a bursting point at 95.4%, says Condon.
DEMAND GROWS EVEN AS PRICES MOVE UP
DEMAND for beef products continues to hold or even grow, although grocery prices are moving upward throughout 2025. That’s according to new research from CoBank’s Knowledge Exchange. Recent USDA data showed that the All Fresh retail beef demand index for the second quarter was at its highest level in at least 25 years, says CoBank. Some of the factors shaping consumer buying behaviors are the heightened interest in dietary protein, changing health perceptions surrounding beef and the availability of restaurant-quality beef at retail stores, it says.
Twelve months ago, the question was whether beef demand would hold up at higher prices but today most analysts are fairly certain that beef value risk is to the upside, says Brian Earnest, lead animal protein economist with CoBank. Retail per capita beef consumption is headed for 60 lbs this year. U.S. consumers can’t seem to get enough protein these days, and, among animal proteins, beef remains king. The latest inflation data from the US Bureau of Labor Statistics showed core inflation was up 2.9% year-over-year. But beef prices increased even more in comparison. The July All Fresh retail price surged by 9% for the year, hitting $8.90 per lb. Even with beef moving to $9 per lb, consumers keep coming with interest in the product, says CoBank.
CoBank cited the improvement in beef quality and increased availability of premium grade cuts at retail locations as a driver for demand. After recognizing quality issues during the 1980s, cattle producers started selectively improving their genetics to produce beef with higher fat marbling and better taste for customers. Currently, 85% of U.S beef is grading USDA Choice or higher. Access to high quality beef has never been better and American consumers have developed a taste for it, says Earnest.
The COVID-19 pandemic led the market to a place where leveling up through access to luxury goods was prioritized over luxury services, says CoBank. Beef, specifically high quality beef, is a luxury good that can be accessed for at-home consumption at a fraction of the cost at fine dining establishments. Health insights by consumers eating beef have greatly improved in recent years, says CoBank. It points to fitness-conscious consumers who crave protein content for muscle production, which often favors beef. The growth in GLP-1 medication for weight loss also changed consumer interest and increased the amount of protein in their diets.
CoBank also mentioned the tight cattle supply in the U.S. The latest USDA mid-year cattle inventory report on July 25 saw the biannual cattle inventory at the lowest mid-year count on record with 94.2M head, a 75-year low. Throughout 2025, analysts will continue to debate whether the American beef herd is still in contraction or rebuilding. But most observers suggest the nation’s cattle supply will remain constrained through at least 2026 and likely through 2027. This means that retail beef prices will remain elevated for the foreseeable future. While larger macroeconomic shifts could influence purchasing behavior in the future, so far consumers have shown little appetite for sacrificing beef, say CoBank.
FAO MEAT PRICE INDEX HITS NEW HIGH
THE monthly meat price index developed by the Food and Agriculture Organization (FAO) of the United Nations reached a new all-time high in July. It averaged 127.3 points, up 1.2% from June and up 6% from July 2024. This was due primarily to global bovine meat prices, which also were at record highs. The average U.S. price of 100% ground chuck in July was $6.34 per lb, up 16% from July 2024 and 27% higher than the most recent five-year average, according to the US Bureau of Labor Statistics. As a comparison, the price for 100% ground chuck from 2020 to 2024 only rose an average of 3.8% each year, says FAO.
The upward trajectory in beef prices is not expected to reverse sharply any time soon, according to industry analysts. As high as prices are, the risk is for prices to go up instead of down, said Michael Irgang, president of Global Risk Management, a firm specializing in commodity risk management for the food and agribusiness industries. A cyclone of geopolitical developments, supply pressures and seemingly unyielding consumer demand has been fueling beef prices to record highs, say observers.
Several Factors Create Perfect Storm
Several factors, both domestic and international, have been supporting the beef price surge, says Irgang. It’s a perfect storm of a bunch of different things coming together at the exact same time. Two U.S. trade partners who supply a high percentage of lean beef to the U.S. have been significantly affected by recent U.S. policies, he says. Brazil, which earlier this year emerged as the top supplier of beef to the U.S., was slapped with a 50% tariff in early August. The South American country, which is limited to 65,000 metric tons of tariff-free beef exports to the U.S. per calendar year, already was being charged a 26.4% tariff on all shipments over the limit. Brazil reached its export limit Jan. 17. But the additional 50% duty enacted August 6 brings the total trade tax on imports of Brazilian beef to 76.4%, essentially staunching the flow of Brazilian beef into the U.S., he says.
Meanwhile, imports of feeder cattle from Mexico, a top U.S. cattle supplier, were halted in May by USDA due to concerns about the New World screwworm, a fly larva that infests the living tissue of warm-blooded animals, including people, which can cause fatal infections. The U.S. typically imported from Mexico about 80,000 head to 90,000 head each month. To not have the imports from Mexico is very inconvenient. Both sides have a vested interest in making this work but it’s not easy, says Irgang.
ERS Notes Decline In Brazil Imports
Beef imports in June totaled 438M lbs, down from the levels seen over the previous three months, although still 28% higher year over year, says USDA’s Economic Research Service (ERS) in its latest Livestock Dairy and Poultry Outlook report. Imports from Brazil were down sharply from May, falling nearly 100M lbs month-over-month. Imports from Argentina and Uruguay also fell month-over-month in June. Monthly imports from Australia have remained relatively steady at around 100M lbs since March. For the year to June 30, Brazil imports at 741.6M lbs were up 383% on the prior year. Imports from Australia at 600M lbs were up 154.4%.
Total imports in the first half of the year were up nearly 737M lbs or 33% from the same period last year, says ERS. The majority of this increase was imports from Brazil, more than double the same period last year. Year-to-date imports from Brazil exceeded the 691M lbs imported in all of 2024. Imports from Australia were also up significantly, nearly 35% higher. Australia’s reported exports to the U.S. show continued growth through June, signaling higher imports in the next couple months once those shipments reach the U.S., says ERS.
Brazil’s reported beef exports to the U.S. began falling off seasonally in May as expected, based on the pattern of previous years, says ERS. Shipments were already falling prior to the announcement of an additional 50% tariff that took effect on August 6. The additional tariff will make beef imports from Brazil significantly less competitive in the U.S. Limited imports from Brazil may still continue as demand for trimmings is extremely strong. Brazil is also the main foreign supplier of heat-treated (shelf stable) beef products to the U.S., so some of those imports are likely to continue, says ERS.
Based on lower expected imports from Brazil partially offset by increased imports from other suppliers, ERS has lowered its forecasts for third and fourth quarter imports by 40M and 50M lbs, respectively. Its annual 2025 forecast is 5.274 billion lbs, a nearly 14% increase from 2024. The annual 2026 forecast is also lowered based on decreased imports from Brazil more than offsetting increased imports from other suppliers. The first quarter is lowered 100M lb to 1.350 billion lbs. The second quarter forecast is lowered 125M lbs to 1.275 billion lbs. The annual 2026 forecast is lowered by 400M lbs to 4.950 billion lbs, which would be a 6% year-over-year decrease, it says. Meanwhile ERS lowers its outlook for 2025 U.S. beef production by 262M lbs from last month to 25.926 billion lbs for an expected year-over-year decline of 4%. This is the result of slower than previously anticipated pace of cattle slaughter and lower expected carcass weights in the second half of the year. It lowers its 2026 beef production forecast by 345M lbs to 25.470 billion lbs, a 2% year-over-year decline.