FED beef processors continue to suffer heavy operating losses as cash live cattle prices remain strong in the face of softer boxed beef prices. Packers last saw profits in the week ended September 12. Since then, live cattle prices declined by $1.44 per cwt live while the national weekly comprehensive cutout (cuts, grinds and trim) declined by $33.51 per cwt. The result is that the six weeks produced an average weekly loss of $165.27 per head, according to HedgersEdge.com. The $208.53 per head loss the week before last was the fourth largest weekly loss of the year. The heaviest loss was $274.23 per head in the week ended August 2. The loss by last Thursday was down to $76.80 per head. Tyson Foods and JBS SA each report results for the calendar third quarter in three weeks’ time and are expected to reveal heavy U.S. beef losses.
Boxed beef cutout values rose the week before last and the Choice cutout strengthened again last week. The comprehensive the week before last averaged $370.86 per cwt, up $4.34 per cwt from the week before. The Choice cutout averaged $368.11 while the Select cutout averaged $351.45. Formula-priced sales accounted for 55.3% of the total volume of 6783 loads. Spot market sales accounted for 27.6%, forward sales accounted for 17.1% and export sales accounted for 11.7%. The Choice cutout the first four days of last week increased by $2.51 per cwt to $378.27 per cwt while the Select cutout declined by $2.14 per cwt to $359.52.
Values Peak In Mid-November
Beef cutout values tend to peak during the second half of November, says Andrew Gottschalk, HedgersEdge.com. As such, any decline that may develop could prove to be temporary, with the initial price support for the Choice beef cutout value remaining at $360 per cwt. Consumer attitudes are declining in the latest national survey. The challenge to maintaining positive beef demand will come from consumers substituting lower priced proteins. Currently, this phenomenon increasingly favors the competing meats. It only requires a minor shift in demand to undermine the price trend for the entire beef complex, he says.
The big surprise in the live cattle market last week was that it saw a rare active trade on Monday, albeit all up north. A total of 24,462 head sold in a range of $228-229 per cwt live or $358-359 per cwt dressed. Tuesday saw another 7923 head sell at similar prices. The only sales down south were in Kansas, where the two days saw 146 head sell at $230 per cwt live. Wednesday saw a light trade up north at the same prices, while Thursday morning a light trade down south at $235 per cwt live.
Prices the week before last averaged $237.89 per cwt live or $369.30 per cwt dressed. These were down $1.93 per cwt and $3.13 per cwt, respectively, from the prior week. But they were up $3.82 per cwt and $6.78 per cwt, respectively, from the week ended October 12. Meanwhile, live cattle futures rallied strongly on Wednesday and Thursday. The October contract closed at $235.27 per cwt, up 777 points over the two days. The next five contracts Wednesday were up 432 points to 570 points. The October contract thus regained its position as being premium to cash prices. Feeder cattle and calf movement off grass generally peaks this month, says Gottschalk. However, there has been some delay in movement this year, as producers have tried to capture additional poundage as much more favorable conditions occurred in most grazing regions. That said, even if technically not occurring until November, the peak in the fall placement levels is near, he says. Meanwhile, latest carcass weights were again not available last week due to the federal government shutdown.
TARIFFS ARE HURTING FARMERS
PRESIDENT Trump’s so-called tariff war with other countries was supposed to bring in billions of new dollars of revenue and benefit all sectors of the U.S. economy. The first might be occurring but the impacts of the tariffs at home are outweighing any benefits. The beef sector is among the agricultural sectors that have been worst impacted. That is because China slapped tariffs on U.S. beef and pork exports to that country last April and did not renew plant registrations for nearly all facilities involved in exporting beef to China. So no U.S. beef has got into China since mid-May.
Most other U.S. agricultural sectors are also suffering under the tariffs, as Jacqui Fatka, lead economist for farm supply and biofuels at CoBank, noted at the recent North American Millers’ Assn annual meeting. New tariffs impacting agriculture are squeezing US farmers and hoisting government assistance payments, she said. Currently, tariffs levied by the administration under the International Emergency Economic Powers Act (IEEPA) average more than 12% across key US agricultural inputs, Fatka said in an agri-food policy update at the meeting. Double-digit tariffs have been implemented on pesticides, herbicides, insecticides, fungicides, fertilizer, tractors and self-propelled machinery, agricultural machinery and parts, and seeds, with levies of nearly 9% on phosphate and 8% on nitrogen, she said.
The tariff increases for U.S. agricultural input imports have led to effective tariff rates of 44% on imports from India, 26% from China, 21% from Switzerland, 15% from South Korea, 14% from Japan, 14% from the European Union and 6% from the United Kingdom, according to CoBank. This is all around the world, all of our ag inputs are now faced with increased uncertainty and changes, said Fatka. This is creating a 12% increase on the overall tariff on these prices, with a lot of uncertainty. We don’t know how long these are going to last or if they get switched or changed, she said.
Concerns Rise Over USMCA
At present, agricultural trade with Mexico and Canada remains subject to the United States-Mexico-Canada Agreement (USMCA), although concerns have risen recently that Trump may seek to revamp that pact. Fatka noted the importance of Mexico and Canada, as well as China, the third largest US trading partner, to US agriculture. Among agricultural commodities, the three nations combined account for more than 70% of corn, 60% of soybean, 50% of pork, 45% of poultry and dairy, 30% of beef and 25% of wheat US exports, CoBank estimates. Tariffs impact all of agriculture, said Fatka. This is just our major three major buyers: China, Mexico and Canada. We can’t live without them. We need to make sure that we review, not renegotiate, the USMCA. There are a lot of concerns from the industry about that, she said.
Trade uncertainty is cutting into exports of some crops, Fatka noted. Year over year, US crop and derivatives exports are down between more than 20% and nearly 100% in rice, cotton, grain sorghum and rye, and are down less than 20% in miscellaneous grain, feed, soybeans, tree nuts and dried beans, based on USDA Foreign Agricultural Service data. Meanwhile, US exports are up more than 20% in oats and corn and have increased less than 20% in wheat flour, ethanol, barley, soymeal and wheat. Overall, about 23% of US non-manufactured agricultural products are exported, led by food grains and oilseeds, while 21% of US manufactured agricultural products are exported, led by grain and oilseed milling products, according to USDA data.
Looking at the health of the US farm economy, Fatka said input costs will edge to record highs next year for many crops. Based on USDA data, CoBank forecasts 2026 production costs to reach $650 per acre for soybeans, $404 for wheat, $454 for sorghum and $956 for cotton, all record highs. Total cost per acre also is projected to rise to $916 for corn, $1335 for rice and $1213 for peanuts in 2026. Most major US farm production input expenses also have climbed, including labor, animal units, seed, property tax and rent for the 2024-25 period, based on USDA data. Expense areas indicating decreases over the period include feed, interest, fertilizer, pesticides and fuel/oil. CoBank is looking at record high input costs for major crops and some others near record highs. For production expenses, CoBank sees a lot of increases, she said.
CoBank Expects 40% Rise In Income
CoBank expects US net farm income to climb more than 40% or about $52 billion to $179.8 billion for 2025, based on USDA data. Reflected in the gain are income of $30.4 billion in government payments, $30 billion in animal product receipts, $8.1 billion in crop inventory adjustment, $1.3 billion in animal inventory adjustment and $300M in other income, minus $12 billion in production expenses and a $6.1 billion decrease in crop receipts. Crop incomes are forecast to decline but it is a different story on the livestock side, said Fatka. For 2025, average net cash farm income stands to rise by 67% year over year for cattle and calves, 27% for poultry, 18% for hogs and 11% for dairy.
MEAT INSTITUE APPLAUDS TRADE DEALS
THE Meat Institute, which represents meat processors and exporters, reacts positively after the White House announces trade deals with Cambodia, Malaysia, Thailand and Vietnam. “We applaud the elimination of onerous establishment and product registration requirements and the reinforcement of sound, internationally recognized science in determining market access,” said Julie Anna Potts, the Institute’s president and CEO. “We are so grateful to U.S. Trade Representative Jamieson Greer and Assistant USTR for Agricultural Affairs Julie Callahan for their hard work to address both tariff and non-tariff barriers to trade that have been challenging meat and poultry exports for years.” Potts also said the Meat Institute is pleased that Cambodia and Malaysia agreed to U.S. protections for common meat product names. As negotiations proceed with Thailand and Vietnam, the Institute will continue working with the White House to ensure the final agreements include these provisions, she said.
In other trade news, U.S. farmers sharply criticized President Trump’s suggestion that the country might import more beef from Argentina. Trump initially said he was considering imports to reduce U.S. beef prices that have climbed to record highs. But cattle producers saw the suggestion as a threat to their livelihoods and free markets, at a time when ranchers are profiting from sky-high livestock prices and strong consumer demand. Family farmers and ranchers have numerous concerns with importing more Argentinian beef to lower prices for consumers, said Colin Woodall, CEO of the National Cattlemen’s Beef Assn. This plan only creates chaos at a critical time of the year for cattle producers, while doing nothing to lower grocery store prices, he said.
Additionally, Argentina has a deeply unbalanced trade relationship with the US, said Woodall. In the past five years, Argentina has sold more than $801M of beef into the US market. By comparison, the US has sold just over $7M worth of American beef to Argentina. Argentina also has a history of foot-and-mouth disease, which if brought to the United States could decimate its domestic livestock production. Although beef prices have increased, consumer demand for beef remains strong because of the work American cattle producers have done to improve the quality and safety of US beef. NCBA calls on President Trump and members of Congress to let the market work, rather than intervening in ways that do nothing but harm rural America, said Woodall.
The United States Cattlemen’s Assn also came out against the proposal. President Justin Tupper said beef prices were a reflection of production costs. Trump’s comments alone triggered an immediate reaction in the markets, as cattle futures dropped significantly. It’s important to underscore that the current price of beef on grocery store shelves reflects the true, inflation-adjusted cost of raising cattle in America today. USCA supports affordable food prices for American families. But it opposes policies or loopholes that manipulate the market, he said.
Cattlemen gained further support when 14 Republican House members, in a letter last Wednesday to Agriculture Secretary Brooke Rollins and Trade Representative Jamieson Greer, expressed concern over the plan to boost imports of Argentine beef. “We encourage the Administration to ensure that any adjustments to Argentina’s tariff-rate quota or inspection regime be contingent on verified equivalency and reciprocal market access for American beef,” read the letter, signed by House Ways and Means Chair Jason Smith (R-Mo.) and 13 others.
CAB HAS ANOTHER BIG YEAR
CERTIFIED Angus Beef (CAB) continues to bank on the resilient demand for high quality beef, which led to one of the brand’s strongest years yet. For the past year, the drumbeat across cattle country has been lower herd numbers, market fluctuations and rising input costs, said CAB. Total beef supply tightened by 3% and beef retail prices climbed to an average of $8 per lb. Yet consumer demand for beef surged to a 40-year high. Despite these challenges, the CAB brand sold 1.235 billion lbs of beef globally in 2024-2025, it said.
The brand’s success this year is the direct result of the hard work and innovation across CAB’s entire community, said John Stika, president of CAB. It’s their intentional efforts to win with Certified Angus Beef year in and year out that has allowed the brand to thrive over 47 years. And while we’re in an environment today that is more complex and competitive, there’s no doubt their collective efforts will continue to shape our business and brand to be strongly positioned to meet the growing demand for premium beef, he said.
Although the US beef herd contracted by 3% over the past year and prices continue to soar, CAB reported that consumer demand for beef has reached a 40-year high. Tight supply will intensify over the next year, and we’ll have to work through those dynamics, Stika said. But the value proposition for Certified Angus Beef is strong and only strengthening in the market.
This year marked CAB’s third best year in the business’s history, with a record-setting month in November and the brand’s all-time best sales month in March, it said. With momentum heading into grilling season, April and May proved to be strong, landing in the brand’s top ten for monthly sales. CAB Prime particularly stood out as consumers’ preference for high quality beef elevated across all segments, including retail, foodservice, international and value-added, collectively increasing 9.7% to 55M lbs sold.
Foodservice Has Second Best Year
Within the foodservice sector, more than 417M lbs of CAB offerings were sold, which marked the brand’s second best year in its history of foodservice sales, said CAB. CAB products could be found everywhere from fine dining restaurants to barbecue establishments and burger joints. In March, sales reached a new all-time record with 40.3M lbs sold in a single month. According to CAB, growth was fueled by an increase in middle meat sales by 3.3%, end meats by 8% and CAB Prime by 9%.
Success was also seen on the retail side as shoppers continued to reach for premium beef cuts, ground beef and value-added products in the meat aisle, said CAB. Despite higher beef prices, CAB’s retail sector sold 525.8M lbs of product, with nine out of ten of the brand’s top retail partners experiencing growth. CAB noted that more retailers adopted premium grinds to their shelves, contributing to an increase of ground beef sales by 6%, collectively, as CAB Prime grew by 5.6%, or 22.3M lbs.
As for international sales, despite a loss of access to key markets like China, CAB brand partners reported record sales in Costa Rica, the Dominican Republic, Honduras, Peru and Panama. In total, 179M lbs of product were sold across more than 55 countries. Leading the pack were Canada, South Korea and Mexico. Once again, CAB Prime proved to be in popular demand with a 20.6% increase internationally, said CAB.
Across retail, international and foodservice sectors, convenient and globally-flavored cuts drove a 9.7% growth for CAB value-added products such as deli meats, hot pot beef rolls and shaved steak, said CAB. The positive momentum marked the fifth consecutive year of growth for CAB’s value-added sector. CAB’s brand partners are sending a very loud, economic signal back to cattle country and ranchers are more focused on quality than ever before, said Stika.