RETAIL beef prices, as expected, soared to new record highs in July. USDA’s Choice beef averaged $9.69 per lb, up $0.42 per lb from the prior month and up $1.26 per lb or 15% from higher than the prior year. The All Fresh price averaged $8.90 per lb, up $0.27 per lb from June and up $0.75 per lb or 9.2% from year ago levels. Analysts are closely examining the prices’ impact on beef sales. Minor cracks in what has been the positive foundation of beef demand are beginning to show, says Andrew Gottschalk, HedgersEdge.com. Late buying to cover Labor Day needs should lend additional support to beef cutout values. But post-Labor Day retail sales will likely provide a glimpse into what will be seen as real demand. Unlike cattle inventories, which are visible, beef demand can erode slowly and is often difficult to initially recognize, he says.
The national boxed beef comprehensive cutout (cuts, grinds and trim) the week before last averaged $367.72 per cwt, up $4.03 per cwt from the prior week. The Choice cutout averaged $367.01 per cwt, up $0.52 per cwt, while the Select cutout averaged $346.17, up $0.80 per cwt. Formula-priced sales accounted for 61.5% of the total volume of 6016 loads. Spot market sales accounted for 26.9%, forward sales accounted for 11.6% and export sales accounted for 10.1%. Boosted again by reduced slaughter levels, the Choice cutout the first four days of last week increased by $14.95 per cwt to $393.79 per cwt. The four-day volume however was light at 288 loads of cuts. Cutout values are expected to continue to strengthen as buying for the September 1 Labor Day holiday continues.
Cash Live Cattle Prices Soften
Cash live cattle prices softened the week before last but last week likely were steady with the week before. The 5-area steer prices for the week ended August 10 averaged $242.01 per cwt live and $381.25 per cwt dressed. These were down $1.16 from the record $243.17 per cwt of the week before and down $2.43 per cwt dressed from the prior week. The cash trade last week was again slow to develop but prices looked like being steady after futures prices rallied strongly on Tuesday. The day saw 2012 head sell up north at $245 per cwt live or $385 per cwt dressed. Another 134 head sold in Kansas at $232 per cwt live. Wednesday saw a slightly more active trade up north, with prices at $244-245 per cwt live or $385 per cwt dressed. Thursday morning saw a more active trade up north, with prices in a wide range ($240-247 per cwt live or $376-385 per cwt dressed).
Carcass weights in the latest reported week ended August 2 all remained well above year ago levels but steer weights were flat with the prior week. They averaged 941 lbs, up 18 lbs from the same week last year. Heifer weights averaged 853 lbs, up 2 lbs from the week before and up 19 lbs from last year. Overall weights averaged 867 lbs, up 2 lbs from the week and up 21 lbs from last year. Also of note is that cattle continue to consistently 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 2 was 84.31%. In contrast, cattle graded below 13% Select. Meanwhile analyst Kevin Grier says the fed cattle basis is returning to normal levels after a long stint of being exceptionally strong but is not likely to influence marketing decisions. Calf and yearling prices remain on an uptrend. Packer margins improved modestly but they remain extraordinarily poor. June beef demand was excellent. Demand in the first half of 2025 greatly exceeded last year. August fed cattle availability is likely to be down 2% compared to last year. Packer negotiated cash and dressed inventories are very tight, he says.
CATTLE ON FEED FORECASTS
David Anderson, Texas A&M University: COF 97.8%, placed 90.0%, marketed 94.0%; Tyler Cozzens, Livestock Marketing Information Center: COF 98.3%, placed 92.4%, marketed 94.2%; Andrew Gottschalk, HedgersEdge.com: COF 97.8%, placed 89.6%, marketed 94.4%; Rich Nelson, Allendale Inc: COF 98.2%, placed 92.4%, marketed 94,2%; Lori Porter, Allegiant Commodity Group: COF 98.2%, placed 92.2%, marketed 94.1%; Mike Sands, MBS Research: COF 98%, placed 92%, marketed 94%
COF TOTAL IS LOWEST SINCE 2017
THE August cattle on feed (COF) total was the lowest for the date since 2017, as this Friday’s COF report will likely show. The total of about 10.9M head was likely down 2% from the prior year and down 300,000 head from the previous five-year average. July placements were likely down 8-10% from a year ago and marketings were likely down 6%. The latter reflected the smaller than expected steer and heifer slaughter during the month. Front-end fed cattle supplies (those on feed 150 days or more) on August 1 were estimated to be 2.809M head says Andrew Gottschalk, HedgersEdge.com. This was 5.5% above the previous year and 1.1% above the previous five-year average, an increase of 281,000 head, he says.
Carcass weight data continues to confirm that fed cattle supplies remain front-end loaded, says Gottschalk. Seasonally, carcass weights should begin to trend higher into the Nov-Dec period. The cost of gain versus the selling price of fed cattle continues to provide the incentive to add additional pounds. There is no relief on that front for the foreseeable future. This incentive is magnified when considering the break-evens calculated for feeder cattle and calf replacements. Given such a substantial incentive to add additional pounds, carcass weights project to remain above prior year levels the balance of this year, he says.
AFG’S NEW PLANT IS FIRST LEED-CERTIFIED
AMERICAN Foods Group’s (AFG) recently-constructed beef processing plant in Wright City, Mo., has been designated as the first-ever LEED-certified beef harvest facility, according to Gray Construction, a fully integrated design-builder. AFG partnered with Gray to bring its vision of a state-of-the-art 800,000 square-foot facility to life. The plant, known as America’s Heartland Packing, has the capacity to process up to 2400 head per day. The new facility will support more than 1300 jobs and is expected to contribute over $1 billion annually to the region’s economy. Production began at the plant in May.
The project exemplifies what’s possible when visionary leadership meets fully integrated delivery, said Rebekah Gray, incoming president and CEO of Gray Construction. Gray is proud to have helped set a new global standard for efficiency and sustainability in the beef processing industry. Gray focused on meeting LEED-certification standards throughout the scope of the project, which included both facility design and construction, she said.
Meanwhile, the city of Amarillo, Texas issues a building permit for a new $253M beef processing plant. Announced in 2022 by Texas Governor Greg Abbott, the facility will be co-owned by producers and employ 1600 workers to process 3000 cattle per day. The plant was previously expected to be completed and occupied by May 2027 but that was pushed back to December 2027. The two-year schedule comes amid glimmers of a turnaround in the U.S. beef herd from current historic lows, with a years-long rebuilding process.
In another move, JBS announce it has reached an agreement to purchase a production facility in Ankeny, Iowa, for $130M, with plans to build out the largest ready-to-eat bacon and sausage plant in its U.S. portfolio. After the initial capital investments and construction are complete, the plant is expected to be operational by mid-2026. The plant will have the capacity to produce 130M lbs of product per year and will process approximately 500,000 hogs annually. The announcement aligns with JBS’s long-term strategy of offering more value-added and prepared foods products to meet the needs of its customers and consumers, said Wesley Batista Filho, JBS USA’s CEO.
JUNE SAW STRONG SOUTH AMERICAN EXPORTS
JUNE beef exports fell 15% from a year earlier mainly because of a 77% year-on-year decline in exports to China. But robust growth in Chile, an ongoing rebound in Colombia and the largest volume of the year to Peru fueled strong June beef exports to South America, says the U.S. Meat Export Federation (USMEF). June shipments totaled 1818 metric tons, up 33% from a year ago, while value rose 94% to $14.2M. While January-June exports to the region were up just 3% in volume (9588 mt), value climbed an impressive 39%. Growth was primarily led by Chile but demand is recovering in Colombia, where access was restricted for much of 2024 due to avian influenza-related restrictions. Full access to Colombia was restored in late September, says USMEF.
Beef variety meat exports to Egypt had trended lower for the past few months but rebounded in June to 3522 mt, up 16% from a year ago and the highest since January, says USMEF. Export value climbed 39% to $6.4M. January-June beef variety meat exports to Egypt were 5% below last year’s pace at 19,129 mt but value increased 12% to $34.7M. The U.S. industry also received great news from the Middle East when restrictions related to halal certification were lifted in the United Arab Emirates (UAE). The UAE is traditionally the region’s largest market for U.S. beef muscle cuts, while most exports to Egypt are livers and other variety meat. June beef exports to Africa, which are also primarily variety meat, totaled 1191 mt, up 73% from a year ago, while export value doubled to just under $2M. Beef variety meat exports were led by growth in Cote D’Ivoire, Morocco and Gabon. January-June shipments to Africa increased 21% from a year ago to 7165 mt, valued at $11.4M (up 37%), says USMEF.
China is all but closed to U.S. beef, with only a handful of plants eligible to ship, says USMEF. June exports plummeted to just 3104 mt, down 77% from a year ago, while value fell 80% to $241M. Despite a fairly strong start to the year, January-June exports to China totaled 54,522 mt, down 38% from a year ago, while value fell 40% to $473.4M.
Trump Delays New China Tariffs
Meanwhile, President Trump signed a new executive order on August 11 that extended the implementation of tariffs on China for an additional 90 days to November 10. Economic representatives from the two countries met in Sweden in July to finalize a new provisional agreement. USMEF said it is a relief that China’s tariffs on U.S. pork and beef will not climb even higher but the need for viable access to China remains urgent (as told to Meat+Poultry). China’s total tariff on U.S. pork and most pork variety meat is 57%. The tariff on U.S. beef is 32% but very little U.S. beef is eligible due to China’s failure to renew plant registrations. Most red meat suppliers are only subject to China’s 12% most favored nation tariff, said USMEF.
June beef exports to Japan totaled 19,993 mt, down 10% from a year ago, while value declined 19% to $147.3M, says USMEF. First half exports to Japan were down 2% to 124,005 mt, valued at $920.3M (down 6%). The Trump administration recently announced a trade and investment agreement with Japan but major changes in beef market access are not anticipated. Japan’s tariff rate on U.S. beef is currently the highest of any major import market at 21.6% but it phases to 9% by 2033 under the U.S.-Japan Trade Agreement signed in 2020. U.S. beef is on a level playing field with Japan’s other major suppliers but Australia is also shipping less beef to Japan as demand has suffered from the combination of a weak yen, high import duties and lack of consumer income growth, says USMEF.
Beef exports in June equated to $392.72 per head of fed slaughter, down 14% from a year ago and again reflecting the absence of China, says USMEF. The January-June average was $410.00, down 2% from the first half of 2024. Exports accounted for 13.1% of total June beef production and 10.9% for muscle cuts, down from the very high ratios of 15% and 12.8%, respectively, in June 2024. For January through June, exports accounted for 13.5% of total beef production and 11.3% for muscle cuts, each down about one-half percentage point from the first half of last year. Meanwhile, Australian beef exports hit another all-time monthly record in July, reaching 150,435 mt. CBW will report further on the record exports in a subsequent issue.
JBS BEEF NORTH AMERICA HAS $233M EBITDA LOSS
JBS SA’s North American beef business appears to have fared much better in 2025’s second quarter ended June 30 than Tyson Foods’ beef segment did. The latter reported an operating loss of $494M. But JBS reported an EBITDA loss of $233M for a negative EBITDA margin of 3.4%. This went against positive EBITDA of $29.0M and a 0.5% margin in the second quarter last year. .Net revenue in the 2025 second quarter was $6.805 billion, 13.6% above 2024’s $5.992 billion. Despite the beef loss, JBS delivered solid financial results overall in the quarter. Net revenue across the company’s diverse operations in North and South America and Australia grew 9% to a new record of $20.997 billion, and net income of $528.1M was 61% higher than in the same period last year.
Beef North America’s revenue growth was driven by strong beef demand in the U.S., says JBS. Even with beef cutout prices at record highs, domestic consumption remained resilient. On the other hand, the industry is facing possibly the worst moment of the cattle cycle, with low availability of animals for slaughter. In addition to the current livestock cycle, the U.S. also temporarily suspended imports of Mexican cattle during the quarter due to animal health concerns. With cattle supplies at restricted levels, live cattle prices also remain at historically high levels and cattle prices have outpaced wholesale beef price growth, says JBS.
The industry in the quarter also faced additional challenges related to accessing international markets, reflecting changes in the North American regulatory landscape, says JBS. But it maintains its strategic focus on excellence in operational and commercial execution, aiming to preserve and strengthen its profitability. Among the ongoing initiatives, the optimization of the product portfolio, the increase in carcass yield and the maximization of plant efficiency stand out. Additionally, JBS has intensified its efforts in efficient supply chain management, with investments ranging from increasing plant efficiency to capacity expansion, it says.
USA Pork Had Strong Quarter
JBS’s USA pork segment performed well in the quarter. It had net revenue $2.059 billion, a 4.8% decrease compared to a year earlier. But adjusted EBITDA was $253.6M, with a margin of 12.3%. This was slightly above the $240.3M EBITDA and 11.1% margin of a year earlier. In the domestic market, net revenue declined although domestic demand remained solid, says JBS. The pork business was also affected on a short-term basis by trade restrictions but JBS says it expects the segment’s performance to return to normal levels over the next few quarters. JBS continues its strategy of expanding its portfolio of value-added products, focusing on solid operational execution and asset efficiency, it says.
Performance in JBS’s Australian division (covering beef, lamb, pork, value-added and aquaculture operations) benefited from a favorable livestock cycle, JBS told shareholders. Net revenue for the quarter was $1.973 billion, up 19.4% on the same period last year. Adjusted EBITDA was $290.2M, up 28.5% on last year. The solid growth in net revenue was driven by increased sales volume in both the domestic and export markets. Net revenue from the beef business grew compared to a year earlier, driven by increased sales volume both in the domestic and export markets, says JBS. The segment maintained a high EBITDA margin, reflecting operational efficiency gains, cost reduction initiatives, and higher processed volumes, driven by increased animal availability.
Net revenue from JBS’s Australian pork business increased in the quarter compared to the same period last year, driven by higher sales volume, says JBS. Additionally, the improved profitability was a result of operational efficiency gains. Primo, its prepared food unit, reported a slight increase in net revenue in the quarter compared to a year earlier. The 8% growth in sales volume compared to the same period last year was offset by lower prices, as consumer demand continues to be pressured by inflation, says JBS.