Global AgriTrends
Back03.20.26
Cattle and Beef Fundamentals Point to Higher Prices Ahead
While feeder and live cattle futures have not been unscathed from recent uncertainty in the Middle East, fundamentals remain solid. Feeder cattle futures (April) lost 8% after the conflict began but have recovered nearly half of that. Live cattle futures (April) slid 7% after the conflict, but have recovered just less than half of that loss. Cash cattle prices have dipped slightly. But beef cutout values have pushed higher.
Supply
While the beef herd has been reduced –12% since 2019, per capita beef supplies in the U.S. have held steady the past 6 years. That is due to increased beef from herd liquidation in 2020-2023 and steer carcass weights rising 9% the past two years. But the smaller herd is now producer smaller calf crops and declines have worked through the system. U.S. beef production averaged –6% lower in January and February. Cattle on feed numbers were supported through longer days on feed for the past 3-4 years (higher carcass weights), but have now started dropping. Cow slaughter is down –14% YTD after big drops the past two years. The lack of cow beef has driven 90% lean trimmings to new record highs about $4.40/lb.
Heifer retention remained muted last year with the January USDA estimate showing beef heifers up 1% and the herd down –1%. While bred heifer prices continue higher, appetite to breed more heifers remains subdued. Dry conditions in Texas, Oklahoma, and Missouri could stifle expansion again this year. Typically, cattle cycles see the highest cattle and beef prices during years of heifer retention. That year is still ahead of us.
Demand
U.S. beef demand remains stellar. Prices have surged the past six years even with steady supplies. Lots of factors contribute including a “protein” craze among all generations, increased beef quality, the foodie movement, suggested protein diets around GLP-1 use, and shifting sentiment toward the health benefits of beef. This new beef demand is a major trend shift. It is different and undeniable. In the past three years, retail pork prices rose 2%, chicken declined –2% and beef rose 34%.
Bottom Line
Momentum in both supply and demand factors show cattle and beef prices breaking records through 2026. And possibly 2027.
Brett Stuart
