Global AgriTrends

01.27.26

Cattle and Beef Market Indicators Suggest Higher Prices in 2026

Today’s look at cattle prices, cattle futures, beef cutout, cut prices, imports, carcass weights and female slaughter all suggest tightening supplies and higher prices into 2026. But cattle futures remain negative (deferreds below nearbys). Very interesting…

Beef export shipments rose to 15,855 mt on bigger shipments to Korea, Japan and Mexico. Beef export net sales also shifted higher, to 15,448 mt on bigger sales to Japan, Hong Kong, and Mexico.

Note that China continues to ban U.S. beef, even after they allocated 164,000 metric tons of the new quota to America. That suggests they are planning for U.S. beef this year. Just not yet.

And it turns out that Brazil’s 1.1 million metric ton quota just got a bump of around 350,000 mt. It turns out that on January one, the quota meters started running on beef to China. Except for Brazil. Just this week, Brazil sought and received an exemption for all “pipeline” product. But only Brazil. China denied this when asked by the Australian government earlier this week, but China also confirmed it to the Brazilians. Until that quota is filled later this year (and 350,000 mt later than most expect), no one can cry foul.

Some thoughts on the current cattle and beef markets:

- Chinese imported beef bids from Brazil surged higher in January to the highest level in 3 years (US$6700/mt, US$3.03/lb)

- Steer dressed weights were 985 last week, up 23 pounds from 962 a year ago and up 38 pounds from 937 two years ago.

- Since 2019, the herd size peak, the U.S. beef cow herd declined -12%. But since that time fed steer carcass weights are up 10%, offsetting the need for a full rebuild. But U.S. consumers don’t want the same amount of beef as in 2019, they want more.

- The December all fresh retail beef price moved to another record high, $9.55/lb. That level is now up 67% from the 2016-2019 average. Beef retail prices are now nearly 2x the price of pork and 4x the price of chicken. Some retailers have expressed concern over lack of ribeye supplies; not price levels, supplies.

- Beef production continues to average around -5% from year ago levels. Even the higher weights cannot overcome the smaller herd making smaller calf crops and the increased female retention.

- The female slaughter ration (cows+heifers as a percent of total slaughter) declined from 52% to 47% during 2025, suggesting that herd rebuilding has begun.

- A week from today (January 30), the USDA will release their biannual Cattle Inventory estimates showing the new beef cow herd size. We are expecting a slight increase from last year suggesting that 2025 was the bottom in the herd size and that 2026 will likely see the high in calf prices. But wait to see that data.

- Cash fed cattle continue to move slightly higher. The gloomy live cattle futures remain negative (deferred contracts below the nearbys). That’s actually incredible considering tightening supplies, rebuild indications, phenomenal demand, and expected tightening supplies ahead.

- Feeder cattle futures have rallied 21% (+$62/cwt) since the Nov 25 low.

- Mexico continues to find screwworm cases within 200 miles of the U.S. border. The administration appeared poised for some type of staged (AZ ports?) reopening, but this may halt that. The new cases were in cows that DID NOT get shipped from southern Mexico proving that the flies are on the move in Northern Mexico.

- But no screwworm in Texas this weekend. Those flies stop flying below 60 degrees. And Texas will not be above 60 degrees this weekend. A severe winter storm is bearing down across the Midwest with significant snow forecast across the cattle feeding belt down into Texas.

- The wholesale beef cutout at $360/cwt remains 10% above year ago levels. Key gainers include chuck rolls, 90% trimmings (now at $407/cwt, up 16%) and 50% trimmings (now at $143/cwt, up 26%).

- The choice – select spread remains near nil, and outlier for this time of year; that suggests plenty of choice or not enough select. But probably plenty of choice and a post-holiday choice hangover from extreme retail price highs.

- Beef imports have surged higher as Brazil rushes to fill their quota. That quota was likely reduced from 65,000 mt to 52,000 mt as Trump gave the U.K. 13,000 mt under the U.K. deal (yet to be codified). Australia is showing indicators of herd rebuilding suggesting reduced exports there this year. And Brazil’s aggressive 2024-2025 kills suggest a correction at some point this year, potentially reducing those supplies as well.

Bottom line: Nearly all indicators suggest tightening U.S. beef supplies and higher prices into 2026. But don’t tell the cattle futures markets that…

Brett Stuart