Cattle Pricing News

Not Done Yet: Despite Packer Investigation Price Shock, Cattle Prices Could Keep Climbing Through 2030

Tue, 05 May 2026 16:12:18 GMT

Fresh policy headlines injected new uncertainty into cattle markets this week, but they haven’t changed the bigger picture driving beef prices higher.

On Monday, Acting Attorney General Todd Blanche and Agriculture Secretary Brooke Rollins announced an intensified antitrust investigation into the so-called “Big Four” packers — JBS, Cargill, Tyson Foods and National Beef — which together process the vast majority of U.S. cattle. The probe, which the Trump administration says includes millions of documents and a push for whistleblower testimony, underscores growing concern in Washington over market concentration, pricing behavior and the impact on both producers and consumers.

That news sent cattle prices sharply lower.

While policy developments like Monday’s news can dominate the markets on any given day, they don’t necessarily alter the deeper supply-and-demand forces shaping the cattle market. And right now, those forces remain firmly intact: Record-high beef demand and historically low cattle supplies mean these strong cattle prices aren’t just here, but they may be here to stay through the end of the decade.

Cattle Prices Not Done Climbing Yet

Oklahoma State Extension livestock economist Derrell Peel says he’s never been this bullish for this long. And the reason is such strong fundamentals at play. The market’s direction is still being driven far more by biology and consumer behavior than by policy headlines. And while the investigation may shape the industry over time, it does not immediately create more cattle or reduce beef demand, which are two factors that remain at the core of today’s price strength.

The result is a market where short-term volatility — whether sparked by policy, disease concerns or geopolitical events — continues to play out against a longer-term bullish trend. And as long as supplies stay tight and consumers keep buying beef, the broader trajectory points toward the same conclusion: Cattle prices may not be done climbing yet.

What makes the current environment so unusual is not just the volatility in cattle prices, but how long demand has held together despite those increases. Consumers have continued to buy beef even as retail prices climb and supplies tighten, resisting the typical shift toward lower-cost proteins like pork or chicken. That resilience has been a cornerstone of the market’s strength, helping sustain the rally even as production constraints persist.

The Supply Side of the Story

Even with that looming concern, the supply side of the equation continues to dominate the broader market narrative. In fact, one of the most striking aspects of the current cycle is how little progress has been made toward rebuilding the U.S. cattle herd, despite strong price incentives that would typically encourage expansion.

“This is the longest in my entire career that I’ve basically had the same outlook,” Peel says. “This thing really started in the fall of 2022, as far as the current price run that we’re on. It continues. And the story hasn’t changed, and we really haven’t changed anything yet that sets up the idea that it’s going to change anytime soon.”

That consistency reflects a deeper theme within the industry. While high prices might suggest an imminent increase in production, the biological and economic realities of cattle production make rapid expansion difficult, especially when producers remain cautious.

“Very, very limited at this point — so essentially no,” Peel says when asked if there are signs the U.S. cattle herd is starting to rebuild. “I mean, we just have very limited indications of a little bit of interest in heifer retention, but not a lot happening yet. We’re watching the weather at springtime. There’s a lot of concern about drought conditions that could derail anything we might want to do anyway.”

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Without meaningful heifer retention, Peel explains the process of herd rebuilding cannot truly begin. And until that process starts, he thinks the market remains locked in a pattern of tight supplies and upward price pressure.

“The bottom line is we really haven’t started the clock yet on the things that would eventually lead to a top in this market,” Peel says.

That delay has pushed expectations further into the future, extending the timeline for when increased production might finally ease the market. Each passing season without expansion reinforces the same dynamic: limited supply supporting prices.

“Oh, yeah, we keep pushing it out,” Peel says. “You know, I’ve already extended it probably two years. We’re still waiting again for that clock to start at this point. So until we see some definitive signs of substantial amount of heifer retention, you know, the path continues as it is.”

Even if producers were to begin retaining heifers immediately, the lag time between that decision and its impact on beef production would stretch for years. That built-in delay is a defining feature of the cattle cycle and one reason why price trends tend to persist once they are established.

“And it’ll be some months after that,” Peel says. “Typically, a year to a year and a half after we start heifer retention would be when we would expect these markets to peak out. So we’re on a timeline now where, if we start saving heifers right now, it’s going to be the end of the decade before we really change overall beef production significantly.”

The Bullish Run in Cattle: How Long Can It Last?

That long runway helps explain why Peel remains firmly bullish — even at today’s record price levels. In his view, the market simply hasn’t reached the point where supply can begin to catch up with demand.

“Still predicting higher highs, as scary as that is for me to say,” Peel says. “We’re at record-high prices, and I expect that we’re going to go higher. I don’t think the peak in prices happens in 2026. I think it’s somewhere after that.”

Those supply constraints and demand dynamics point toward a market that could remain elevated well into the latter part of the decade.

“It’s really hard to say right now until we sort of know how it’s playing out,” Peel says, referring to how the eventual peak might unfold. “It’s all really kind of ahead of us as far as that goes. I don’t see it happening. We’re on such a slow build that I think it’s going to be more of a measured approach rather than a sharp peak.”

Still Some Uncertainty Ahead

Still, while the long-term outlook remains bullish, the short-term environment is anything but stable. Day-to-day market action continues to be shaped by uncertainty, with external shocks triggering rapid price swings that can complicate marketing decisions for producers.

“In the meantime, we’re dealing with a lot of risk and uncertainty in this market,” Peel says. “So we’re in this unusual situation where we have a bullish outlook and yet a really strong need for producers to be doing risk management just because the market is so volatile on a short-term basis.”

One Risk: High Gas Prices

One of those risks is the fact outside economic pressures are beginning to build. Gas prices recently jumped 33¢ in a single week, reaching their highest level since July 2022. While that may seem disconnected from cattle markets at first glance, fuel costs play a direct role in shaping consumer purchasing power, especially when increases persist over time.

“Economists define demand as willingness and ability to purchase products,” Peel says. “The willingness is there. But the ability, high gas prices is probably the biggest threat out there.”

That distinction between willingness and ability is critical to understanding where the beef market could be headed next. So far, consumers have shown little hesitation in purchasing beef, even at elevated price levels. However, sustained increases in everyday expenses like fuel can gradually erode disposable income, forcing households to make tougher decisions at the meat counter.

“If the current geopolitical situation persists and keeps gas prices high for another few months, at some point in time it may impact consumer incomes enough that it forces them to make more adjustments,” Peel adds. “And that would be the biggest threat to beef demand at this point.”

That potential shift has not yet materialized, but it represents one of the few risks to an otherwise bullish outlook. For now, demand remains strong, helping support prices even as supplies remain historically tight. But the longer external cost pressures linger, the more likely it becomes that consumer behavior could begin to change.

New World Screwworm Risk

Animal health concerns have been one of the more visible drivers of that volatility, particularly when it comes to New World screwworm . Even unconfirmed reports or isolated cases have proven capable of moving markets, highlighting just how sensitive current conditions are to uncertainty.

“These animal health issues are certainly one of them,” Peel says. “We’ve got a lot of things going on right now that are kind of like that. We get news, and markets don’t like uncertainty. And so that’s what we’re dealing with here.”

Peel says in some cases, the uncertainty is worse than the reality, which means the market is even more sensitive to any type of news.

“But the market is also very resilient. So when we do see these impacts, whether it’s from New World screwworm or concerns about infrastructure or geopolitical events, whatever it is, the market tends to react, but then it bounces back pretty quickly,” he points out.

But for producers, Peel says volatility is a major risk.

“And the challenge for producers is to not get caught where you have to be marketing something in the middle of one of these short-term shocks in the market,” he says. “And so that’s the challenge for them to try to manage around that volatility.”

Is the U.S. Prepared?

From a policy and preparedness standpoint, Amy Hagerman, Extension specialist for agriculture and food policy at Oklahoma State University, emphasizes risks like New World screwworm extend beyond cattle imports alone. The pathways for introduction are broader, requiring a more comprehensive approach to monitoring and response.

“This is a pest that likes anything that’s warm-blooded,” Hagerman says. “And so it’s going to catch a ride with anybody that it can catch a ride with.”

Yet, there’s a general assumption that even though the Southern border remains closed to live cattle imports, that if NWS enters the U.S., it won’t be because of cattle. Instead, it could enter the U.S. via wildlife or something else.

“I think a higher level of awareness, education and vigilance is really important, whether we’re talking about pets for somebody who has vacationed in Mexico, or even individuals, or whether we’re talking about wildlife,” Hagerman says. “We’ve seen a real effort, publicly and privately, to kind of enhance that awareness.”

The latest NWS case, according to Hagerman, is less than 70 miles from the U.S. border and points to the urgency of ongoing monitoring efforts in the region.

“As somebody who does a lot of emergency preparedness, I can tell you that all plans never survive interaction with reality,” she says. “But I do think we’ve put a lot of effort, a lot of time into preparing for this — setting up the infrastructure and educating producers because this is going to be a producer-management issue by and large.”

Possible Permanent Changes of Flow of Cattle From Mexico to the U.S.

Peel adds that while such issues may be costly and complex at the individual level, their broader market impact may be limited compared to supply fundamentals.

“I think the risk here for the impact of New World screwworm is not so much a broader market one, because it’s going to be a very costly issue for producers individually to manage, for regional efforts to control it,” Peel says. “It’s probably not going to impact the overall market all that much.”

Beyond animal health, trade policy remains another uncertain variable. The continued closure of the southern border to live cattle imports has already reshaped supply flows, and prolonged disruption could lead to more permanent structural changes.

“I think we could,” Peel says when asked whether trade patterns might shift for good. “I mean, arguably the biggest impacts of all of this in terms of the economic impact of the border being closed, we’ve already felt up to this point.”

“You know, we probably didn’t get 700,000 or 800,000 head of Mexican cattle last year that we would have gotten,” Peel adds. “And so, you know, we’re past that now, but the thing is, those cattle have been dealt with. They’re using them in Mexico. They have infrastructure to utilize those cattle in their domestic market.”

Peel says the longer this goes on, the more supply chains and production systems need to adjust to the fact the normal or historic trade flows have changed.

“The risk is that maybe we lose it permanently. It changes things on a permanent basis,” Peel says.

No matter the day-to-day noise, the market remains defined by a rare combination of strong demand, constrained supply and mounting external pressures. While higher fuel costs could eventually test consumers’ ability to keep paying record prices, the lack of herd expansion continues to underpin a bullish outlook, one that may keep cattle prices elevated through the end of the decade.

The Great Dairy Migration: Why the Upper Midwest Is Winning the Heifer Game

Wed, 11 Feb 2026 12:17:46 GMT

The dairy cattle market is currently navigating a period of significant geographical and economic transition. As regional milk surpluses and processor restrictions reshape the landscape, the movement of cattle is telling a story of an industry in the midst of a “Great Migration.”

According to Jake Bettencourt with TLAY Dairy Video Sales, the market for 2026 is defined less by a fear of softening prices and more by a strategic shift toward the Upper Midwest and a relentless focus on the black calf premium.

The Floor on Cattle Prices

As dairy producers look toward 2026, concerns about fluctuating milk prices have led some to wonder if dairy cattle values will begin to soften. Bettencourt acknowledges there is some room for a slight adjustment, but he doesn’t anticipate a dramatic drop. The reason lies in the opportunity purchase.

“Much softer than we are right here and now, producers without immediate need for cattle would purchase cattle if they were any softer,” Bettencourt explains.

He notes that many producers are ready to cull older, less efficient cows and replace them with younger animals if the price gap narrows. This internal herd refreshing creates a natural floor for the market; as soon as prices dip, the demand for younger-for-older swaps surges, propping values back up.

The Midwest Magnet

Perhaps the most visible trend in the current market is the destination of the cattle. While regulars continue to buy cattle to fill holes caused by weather or reproduction issues, the bulk of cattle being merchandised for new or expanding facilities are heading to the Upper Midwest.

The migration of cattle is being driven by a powerful pull from the Midwest. As billions of dollars in new processing capacity come online in the Upper Midwest and Plains states, these regions have become the industry’s primary growth engines.

While Western states like California and Idaho remain dense dairy hubs, the most significant new opportunities for expansion are happening farther east. Consequently, Western cattle are being funneled toward these new facilities in the Midwest, where the infrastructure and market conditions are most conducive to long-term growth.

This pull toward the Midwest is perhaps most evident in South Dakota. The state has seen its dairy cow population more than double over the past decade, marking a 117% increase, according to USDA. The growth is a result of strategic planning and collaboration among stakeholders, says Tom Peterson, executive director for the South Dakota Dairy Producers. The surge is closely tied to the expansion of processing facilities, fueling increased demand for dairy cows.

In the last five years alone, the number of dairy cows has risen by 88,000, or 69%, positioning South Dakota as a national leader in dairy cow inventory growth.

“Leaders and stakeholders came together to develop a plan not only to ensure dairy survived in South Dakota, but with aspirations of creating a dairy destination for the state,” Peterson says.

In economic terms, South Dakota’s dairy industry generates $1.1 billion in wages and contributes significantly to both federal and state tax revenues. The sector supports 15,000 jobs, underscoring its integral role in the state’s economy.

For cattle moving out of the West, South Dakota represents the gold standard of this new processing-driven frontier.

The Black Calf Premium: Beef Over Genetics?

One of the most surprising shifts in buyer preference is the value placed on the calf a heifer is carrying. While high-quality genetics have traditionally been the primary driver of heifer value, the current beef-on-dairy boom has created a new hierarchy.

Bettencourt shared a striking example from January that highlights this shift. One load of Holstein springers from a top-tier herd with impeccable records and sexed-semen confirmation sold for $3,300. Meanwhile, two loads of heifers from raisers — with no birthdates, no records and bred to natural-service Black Angus bulls — sold for $3,400.

“The main trend currently is, ‘What calf is a springer carrying?’” Bettencourt notes.

In today’s market, the immediate, high-value payout of a beef-cross calf can sometimes outweigh the long-term genetic reputation of the cow itself. For many buyers, the beef-on-dairy revenue is a critical component of their 2026 survival strategy.

Signs of Future Growth

Despite the challenges in the West, the demand for open heifers remains robust, which Bettencourt views as a clear indicator that the industry is still planning for growth. Fresh heifers also remain in high demand, though Western consignments face a slight disadvantage due to the freight costs required to get them to the Midwest.

As the industry moves toward 2026, the cattle market reflects a broader structural change. The dairy producer of the future is increasingly focused on vertical integration, whether that means moving to a more favorable milk-marketing region or diversifying income through the beef-on-dairy market. While the geography of the American dairy farm may be shifting, the demand for quality young stock remains the heartbeat of the industry.

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U.S. Cattle Inventory Hits 75-Year Low at 86.2 Million Head

Fri, 30 Jan 2026 21:08:07 GMT

As of Jan. 1, 2026, the U.S. beef cattle herd stands at 86.2 million head, continuing a downward trend. Despite a year of strong prices, USDA’s annual Cattle Inventory Report released Friday shows the U.S. cattle inventory shrank another 0.35% and now sits at its smallest size in 75 years.

“I would say the story continues,” summarizes Derrell Peel, extension livestock marketing specialist from Oklahoma State University. “I mean, it really doesn’t change the pattern that we’ve been in for the last three years now.”

Quick Report Stats:

Total Cattle and Calves Inventory: 86.2 million head (Down 0.35%)
Beef Cow Herd: 27.6 million head (Down 1%)
2025 Calf Crop: 32.9 million head (Smallest since 1941)
Beef Replacement Heifers: 4.71 million head (Up 1%)

Patrick Linnell, CattleFax director of market research, calls the report bullish.

“I think the big picture message of this report is expansion, while there was some signs of it within this report, by and large expansion remains elusive at this point,” he says.

What Are the Big Takeaways from the USDA Report?

According to Peel, the data highlights two critical areas:

1. Shrinking Cow Herd: The beef cow inventory fell 1% to 27.6 million head.
“The industry technically got a little smaller in 2025,” Peel says.

Linnell adds, “As you looked at just how tight beef cow slaughter was this past year, us and other groups had expected we would actually see an increase in the beef cow herd. Small, but an increase nonetheless. However, that’s not what this report showed.”

2. Heifer Retention Signs: Beef replacement heifers rose 1% to 4.71 million.
“There was a slight uptick in beef replacement heifers, not enough to amount to any growth in 2026, or probably even in 2027, but maybe it’s the beginnings [of a rebuild].”

John Nalivka, Sterling Marketing Inc. president, says the report indicates while replacement heifers was up 1% and those expected to calve were also up 1% from 2024 or 17% of the beef cow herd.

“From 2015 to 2018 when producers began aggressively building herds, the average number of heifers that were identified as replacements on the Jan. 1 inventory was 6.2 million or an average heifer retention rate of 21%,” he explains.

Nalivka says heifer slaughter during 2025, at 9.5 million, was down 7% from the prior year but still represented 52% of the heifers weighing more than 500 lb. on Jan. 1, 2025. In 2024, the industry slaughtered 56% of the January 1 heifers weighing more than 500 lb.

“When the industry was retaining heifers to build herds, the percentage of heifers weighing over 500 lb. that were slaughtered ranged from 39% to 49%,” he adds.

Why is the 2025 Calf Crop Significant?

The calf crop estimate was reduced to 32.9 million head — a 2% drop from 2024. This marks the smallest U.S. calf crop since 1941. This scarcity will be the primary driver for market dynamics in the coming years.

The calf crop in 1941 was approximately 31.8 million head. While the industry saw a significant liquidation in 2014, the calf crop that year only dropped to roughly 33.5 million. This means the current contraction has pushed production levels back more than 80 years.

Outlook: What Will Cattle and Beef Prices Do in 2026?

Peel predicts the small calf crop and tightening feeder supplies will push prices even higher.

“We’ve got record-high prices, and we’re going to see them push even higher for cattle and beef,” Peel says.

He reminds producers it’s important to keep in mind that it’s not just about supply.

“Demand has also continued to be remarkably good for beef as prices have gone up,” he says. “Beef prices have increased relative to pork and poultry. There are alternative proteins that consumers could be turning to, and they’re not. So that’s a very positive sign from a beef industry standpoint.”

The “Historically Slow” Rebuild

Unlike the rapid expansion seen 10 years ago, Peel expects this cycle to be much slower. Producers are cautious, remembering how quickly record prices vanished in the past.

“I do think we’re probably beginning, but it’s certainly not a concerted effort,” Peel says. “There’s not a strong, broad-based initiative in the industry. It will probably grow, but I think it’s going to continue to grow pretty slowly.”

He explains the industry has outlasted the previous cycle highs by two-plus years.

“I think producers are coming around to the idea that this is a more sustained story,” Peel says.

What is the Take-Home Message for Producers?

The market is signaling a desperate need for a rebuild.

“The incentive is there, the value of forage is there,” he says. “If you’ve got forage you can use to raise calves, the market wants you to do that. And if you aren’t fully stocked, then it’s encouraging you to think about doing that. I think the main message for producers is to take advantage of this market.”

He also encourages producers to maintain the productivity of their herds.

“We have cut cow culling so far in the last two to three years that some of these cows are going to have to be culled going forward,” he explains. “So, we got to have a few more replacement heifers just to maintain the productivity of the herd. Take care of that first and then if you need to restock. I understand the tradeoff between selling them now for what is a record price versus investing in the future, but you know, sooner or later, we have to make that investment and look a little bit farther down the road.”

Other January cattle report highlights include:

Of the 86.2 million head inventory of all cattle and calves, cows and heifers that have calved totaled 37.2 million.
The number of milk cows in the U.S. increased 2% to 9.57 million.
The number of cattle on feed was down 3% to 13.8 million.

Nalivka adds, “Only time will tell as the year progresses to determine if USDA’s Cattle Inventory is on track. One cross-check will be cattle slaughter which is an actual number reported to USDA by the packers. The inventory is generated from an annual survey number. I understand that USDA aligns annual surveys with the five-year Agricultural Census. To say the least, I have greater confidence in numbers reported to USDA that can cross-check the validity of the survey.”

He does not expect the Cattle Inventory Report to have an impact on cattle numbers or the market going forward through 2026 and into 2027, particularly with a 2% smaller 2025 calf crop.

“Numbers will continue to tighten and when coupled with continued strong demand for beef will support the market at levels at and likely above the market peak seen during third quarter 2025,” he summarizes.

Glynn Tonsor, Kansas State University ag economist, posted on LinkedIn his analysis of the report. He shares state-level beef cow inventory estimates (of seven states with more than 1 million head) Kansas’ 7% decline stands out while Missouri, Montana, Nebraska and Texas are estimated to be down 1-3% and Oklahoma and South Dakota are flat. Only Texas has a sizeable increase in estimated replacement heifers.

He shares two broader points:

While it certainly is valuable to count the number of beef cows, understand status of herd expansion, and other factors that is far from a complete story on industry supply dynamics. In short, the industry has implemented a number of efficiency gains resulting in the net effect of more edible beef production per cow in the industry.
It has become way too common to focus on supply and overlook demand dynamics. In fact, recent work with Brian Coffey documents how recent beef price patterns have been impacted more by strong consumer beef demand than any supply-side adjustments .

Analyzing the inventory numbers Peel summarizes, “It’s just amazing to me that we continue down this path. We’ve kept extending the timeline. You know, technically, with the beef cow herd and the way we look at cattle cycles, I thought 2025 would turn out to be officially the low. Well, now we’re even smaller in 2026, so we will have to wait until next year’s number to see whether this is the low. We just keep pushing this timeline out that provides even more opportunities for producers to take advantage of this market.”

Bi-annual Cattle report would be called lightly positive. 1) There was no sign of any type of January 2015 expansion (retained beef heifers +9.5%). 2) Overall, numbers came in just below the four analyst expectation. pic.twitter.com/lvNaDBusz3
— Rich Nelson (@RichNelsonMkts) January 30, 2026

To obtain an accurate measurement of the current state of the U.S. cattle industry, NASS surveyed approximately 35,000 operators across the nation during the first half of January. Surveyed producers were asked to report their cattle inventories as of Jan. 1, 2026, and calf crop for the entire year of 2025 by internet, mail, telephone or in-person interview.

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Cull Cows Defy Seasonality

Tue, 18 Nov 2025 14:04:31 GMT

All the talk of relaxing tariffs on imported beef, knowing that the majority of our beef imports are lean beef trimmings to go into ground beef competing with cull cow beef, suggested it might be time to take a quick look at the cull cow market.

Most will remember that cull cow prices tend to hit their seasonal lows in the rall. The most important reason for the price decline is that more cows are culled from the herd in the fall.

For beef cattle, the largest proportion of cows are culled in the fall following calf weaning. On the dairy side, cow culling increases from summertime lows. The increase in supplies of cows for sale results in lower prices. Another contributor to lower prices is the end of grilling season, with consumers shifting over to more fall and winter consumption patterns.

(USDA-AMS Livestock Marketing Information Center)

So far this fall, the cull cow market has defied normal seasonality. Southern Plains cull cow auction prices hit about $165 per cwt. back in June and have remained there since then. A couple weeks of declines were followed by rebounds back to about $165 per cwt. National average cutter quality cows have declined recently, slipping about $9 per cwt. to $126.

(USDA-AMS Livestock Marketing Information Center)

While the live cow market has not declined much, the same cannot be said for the cow beef market. The boxed cow beef cutout climbed to $340 per cwt. but has declined to $317 over the last two months. Wholesale 90% lean beef has declined from $436 to $404 per cwt. over the same period. Both the boxed beef cutout and wholesale 90% lean have followed the normal season pattern, declining into the fall.

(USDA-AMS, USDA-NASS Livestock Marketing Information Center)

We are likely to see some increased culling from the dairy side of the beef industry in the coming months. USDA’s latest milk production report indicated the nation’s dairy cow herd at 9.85 million head. That is the largest herd since at least 1993.

Milk production in September was 4% larger than the year before. Milk prices are beginning to decline sharply with increased production. There is no doubt that the increased returns from using beef bull instead of dairy breed semen to produce beef-on-dairy calves is boosting profits and aiding in the dairy herd expansion.

Beef cow culling is likely to remain low due to the historically small cow herd and incentives to expand. More dairy cow culling and less beef cow culling will continue to leave cull cow prices high.

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Experts Say Strong Cattle Prices Could Continue Through the End of the Decade

Mon, 17 Nov 2025 14:43:24 GMT

Despite political rhetoric surrounding cattle and beef prices, a panel of leading cattle market experts says the fundamentals remain firmly supportive of historically strong cattle prices for years to come.

During a discussion at the Missouri Governor’s Conference on Agriculture, Derrell Peel, Extension livestock specialist at Oklahoma State University; Lance Zimmerman, senior animal protein analyst with Rabo AgriFinance; and Bryon Wiegand, director of animal science at the University of Missouri, offered a united outlook: The tightest cattle supplies are still ahead, and demand remains exceptionally strong.

Are Cattle Prices “Too High”? Experts Say No

Recent comments from Washington suggest cattle and beef prices are “too high,” but Peel says the current price levels make sense when viewed in context.

“There’s always a speculative element to these markets,” Peel says. “That means there’s always an opportunity to push prices a little high, and we can certainly see temporary corrections because of that. But fundamentally, I don’t think we were too high. This market has very strong underlying foundations for why we’re where we are right now.”

Zimmerman adds that per capita beef supplies haven’t changed enough to justify blaming supply alone.

“We want to talk about tighter supplies, and yes, the cow herd has been in decline since 2019,” Zimmerman says. “But per capita beef supplies, which really influence market prices, have essentially been steady. We’ve been between 58 lb. and 59 lb. per person for the last six years. So when we talk about record-high beef prices, most of that increase is actually coming from demand. Based on our models, this is the strongest beef demand we’ve seen since 1983.”

The Tightest Cattle Supplies Haven’t Even Arrived Yet

Even after several years of liquidation, Peel says the cattle industry hasn’t reached the tightest point of this cycle.

“We’ve tightened feeder supplies significantly,” he says. “We’ve masked some of that tightness at the feedlot level, but the feeder cattle supply out in the country is extremely tight, and we still don’t have any fundamental data that shows we’re retaining enough heifers to start rebuilding the herd. So from that standpoint, the tightest supplies are still ahead of us.”

Peel says that means beef production will move lower and per capita supplies will tighten further over the next several years.

Zimmerman notes the market still hasn’t fully absorbed the impact of fewer Mexican feeder imports.

“I think the market priced some of that in on the feeder side, but it’s not fully reflected in fed cattle slaughter yet,” Zimmerman says. “Those double-digit declines in Mexican cattle imports are worth another 800,000 to 1 million head decline in slaughter, all else equal. That’s going to show up in this fourth quarter and especially next year.”

Elevated Prices Could Persist for Much of the Decade

With supplies tightening further, Peel says elevated cattle prices could stick around well into the decade.

“I think we could see elevated cattle prices for much of the rest of the decade,” he says. “History tells us that we tend to put in a peak about a year to a year and a half after we know we’re saving heifers for rebuilding. And I’ll say this, people worry about a sharp drop like we saw about a decade ago, but this is a very different situation. A decade ago was the fastest rebuild in history. This time, we’re on the slowest rebuild in history. It’s a completely different model.”

Speculative Money Pulls Back, but Cash Markets Stay Strong

Political statements earlier this year triggered fund liquidation in cattle futures, but Zimmerman says cash fundamentals remain intact.

“We had almost a record-long speculative position in both live cattle and feeder cattle futures,” he says. “Then, a statement comes out from the White House , and those funds start heading for the exits. But here’s the thing, futures markets are paper markets, and they ultimately have to come back to the cash fundamentals that drive them. Right now the market is basically telling the cattle sector, ‘Prove it to us. Show us these valuations are justified.’ And so far, the cash market is doing exactly that.”

Zimmerman believes futures can rebound as supplies tighten and demand remains historically strong.

“As we go forward, it’s going to come down to supply and demand proving those price levels,” he says. “I do think the picture is favorable enough that we get back to those earlier highs and even exceed them over the next year or two.”

Consumers Still Willing to Pay for Beef

When asked whether beef prices have reached a level consumers reject, Peel says the marketplace shows no signs of that.

“The market is telling us beef prices are not too high,” Peel says. “Consumers are willing to pay what they’re paying. There are plenty of alternative proteins they can turn to, and they’re not turning away from beef. It’s easy to pick out beef as a target when inflation is getting a lot of attention, but consumers will turn away naturally when they feel they need to, and we aren’t seeing that.”

Packers Stay in the Red, but Consolidation Isn’t Imminent

Wiegand says packers are facing substantial financial pressure.

“We have some packers that are eight quarters in the red,” he says. “Right now the margin sits with the feeder. Corn prices are low, cattle are worth a lot and packer margins aren’t just tight — they’re upside down. And the big question is how long they can weather that.”

However, Peel says packers will hold on as long as possible.

“They knew this was coming, and they prepared as well as they could,” he says. “Packers are diversified across other proteins and global markets, so that gives them time. But there is a limit. None of them want to give up market share in a sector this concentrated, so they’ll hang on as long as possible.”

Read more about Peel’s comments regarding the industry chaos today: Beef Industry Chaos: Tight Supplies, Strong Consumer Demand and Political Interference

States Look to Expand Small Processing Capacity

Missouri is investing in smaller processors, and Wiegand says those efforts are helping at the local level.

“We’ve created incentives for small and very small processors, especially around cold storage and upgraded equipment,” he says. “A lot of these businesses are squeezed on labor, and many aren’t full-service slaughter operations, but they are finding success in value-added products. They make a difference locally, but in the national picture, they’re still just a blip because 95% of the market sits with about four companies.”

He adds that “buy local” momentum remains strong since COVID-19 and continues to support these smaller processors.

It All Boils Down to This

All three experts agree the U.S. cattle market remains supported by historically strong fundamentals. Supplies are tightening, demand remains robust and herd rebuilding is expected to be slow, setting the stage for strong cattle prices potentially through the end of the decade.

Your Next Read: Did the President’s Plan to Lower Beef Prices Wreck the Bull Run in the Cattle Market?

As Markets Search for Clarity, USDA Says NASS Will Issue Key Reports in November Despite Government Shutdown

Fri, 31 Oct 2025 16:30:12 GMT

The federal government’s continued shutdown is no longer just a Washington standoff — it’s becoming a real-world problem for farmers and ranchers. As the days drag on without resolution, three Kansas State University economists warn that even with FSA offices back open, the absence of key USDA reports is rippling through every corner of the ag economy, from commodity markets to cattle prices and farm-level business planning.

But on Friday, USDA-NASS issued a bit of surprise. The agency says NASS will release key data in November for the following reports , some with a delay:

Milk Production – Nov. 10 (previously scheduled for Oct. 22)
Crop Production – Nov. 14 (previously scheduled for Nov. 10)
Cattle on Feed – Nov. 21 (as previously scheduled)
Milk Production – Nov. 21 (as previously scheduled)
The World Agricultural Outlook Board will release the World Agricultural Supply and Demand Estimates (WASDE) in conjunction with the Crop Production report on Nov. 14.

With much of the agency still furloughed, there are questions regarding how NASS will have enough staff to provide those key reports. The release didn’t offer any additional details, only saying those key reports will be released in November.

However, there are a few key reports still missing, which includes daily flash sales reports and weekly export sales information.

A Data Blackout Hits the Heart of Agriculture

Until now, the shutdown has silenced the regular flow of government data that producers, analysts and traders depend on — reports like the weekly export sales, crop progress and Cattle on Feed updates, as well as the highly anticipated World Agricultural Supply and Demand Estimates (WASDE).

“The fact that the government is still shut down means we aren’t getting those weekly export sales reports,” says Allen Featherstone, head of the department of agricultural economics at Kansas State University. “That’s a real problem because we rely on that information to confirm what’s actually happening in the market.”

Is China Actually Buying? The Absence of Flash Sales Reports Creates Confusion

With the U.S. and China negotiating renewed agricultural trade commitments , there are fresh promises of more purchases in the weeks and months ahead. U.S. Treasury Secretary Scott Bessent said on Thursday that China has agreed to buy 12 million metric tons of American soybeans during the current season through January and has committed to buying 25 million tons annually for the next three years as part of a larger trade agreement with Beijing.

Featherstone notes that while China claims it is buying U.S. soybeans, the lack of USDA verification makes it difficult to gauge the truth and confirm those buys are happening. And in USDA’s announcement Friday, there was no indication the flash sales and weekly export sales will resume.

“Earlier this week, China reportedly purchased three vessels, about 180,000 metric tons, but not having official data from USDA is a major issue,” he says. “Tracking purchases becomes challenging when the normal reporting mechanisms are down.”

Despite some optimism around U.S.-China trade progress, Featherstone says markets are hesitant to believe much until concrete export numbers appear.

“If China doesn’t come through, that will lead to more negativity in prices given the size of this year’s crop,” he says. “China imports roughly 60% of the world’s soybeans, and if they don’t buy from us, that’s a big problem.”

Featherstone emphasizes the importance of diversifying U.S. export markets.

“We need to broaden who’s buying our products,” he says. “Relying too heavily on one trade partner makes us vulnerable, and this shutdown is a reminder of just how fragile that system can be when government data and diplomacy both stall.”

No November WASDE?

While some private companies attempt to replicate USDA’s data models, those efforts often fall short, according to Terry Griffin, K-State’s precision agriculture economist.

“We’re not likely to have a November WASDE because all the footwork that leads up to it hasn’t happened,” Griffin explains. “Even if the shutdown ends this weekend, that report won’t be ready. There’s just too much groundwork that hasn’t been done.”

He says the lack of USDA reports has forced brokers, trading firms and agribusinesses to depend on private estimates that vary widely.

“They’ve become so reliant on USDA’s National Ag Statistics Service that they’re struggling right now to do their business,” Griffin says. “It’s throwing off everything from national models to local crop forecasts.”

Griffin also points out the shutdown’s impact reaches beyond the boardroom and into academia.

“We have a graduate student working on a peanut production forecasting model, and she’s using crop progress data that come out every week,” he explains. “Without those reports, she can’t validate her model. The data blackout affects research, innovation and business planning all at once.”

Cattle Producers Face Growing Uncertainty

The shutdown’s effects extend deeply into the livestock sector, where missing data is already creating confusion and volatility. Glynn Tonsor, K-State livestock economist, says the absence of reports like Cattle on Feed and slaughter estimates makes it difficult to assess market fundamentals.

“The Cattle on Feed Report is something we normally get monthly. Historically, it has a steer and heifer breakdown, which would be quite useful at the moment as the most recent insight about whether we’re expanding the herd or not, and we’re not going to have that detail,” says Tonsor. “There’s also been a lot of discussion about beef prices and some accusations or desires to make those lower, and we’re actually already behind on what the beef price is in this country. So there’s lots of examples that we could give you that are not just livestock and not just crops. And the longer the shutdown goes, the longer those data gaps exist and build, the harder it is for anybody, whether it’s an academic like us up here or private sector or individual producers, to adjust.”

He notes while we did see life in the cattle market this week, if you look at what happened since President Trump made comments about cattle prices being too high , the cattle market has pulled back significantly in recent weeks.

“Roughly $200 per head has come off the value of cattle in just 10 days,” Tonsor says. “If you’re a cow-calf producer, you’re still positioned for 2025 to be a good year, but uncertainty is the biggest risk right now. Anything that elevates uncertainty delays long-term investments, whether that’s expanding the herd or making capital improvements.”

That uncertainty isn’t only about market data. Tonsor says the political noise out of Washington, including renewed calls for mandatory Country of Origin Labeling (MCOOL), adds to the confusion.

“Taste remains the main driver of beef demand,” he says. “Origin and traceability rank much lower for the average consumer. There are niche opportunities, but for most people, it’s not what decides their protein purchases.”

A Cloud of Uncertainty Over Rural America

For now, K-State’s economists agree on one thing: The shutdown’s ripple effects are growing with every passing day. From grain markets to livestock pricing, from academic research to on-farm decision-making, the absence of reliable government data leaves agriculture flying blind.

“The longer the shutdown goes, the more those data gaps build,” Tonsor says. “And the harder it becomes for anyone, whether you’re an academic, a trader or a producer, to adjust.”

Political Blame Game in Washington

The political blame game continues in Washington, and it’s creating a stalemate. The Democrats are blaming the GOP, and the GOP is blaming the Democrats, both claiming the other party doesn’t care about every day Americans, otherwise the other side would make concessions to reopen the government.

House Committee on Agriculture Chairman Glenn “GT” Thompson, R-Pa., released a statement on Friday, the day before SNAP benefits are set to expire, saying the prolonged government shutdown is caused by Democrats in the U.S. Senate.

“Because Senate Democrats insist on keeping the federal government shut down, more than 40 million Americans — including children, seniors, veterans and military families — will not receive their November SNAP benefits beginning this weekend. The No. 2 House Democrat acknowledged that suffering families are their ‘leverage’, confirming that this is a political choice.”

U.S. Representative Angie Craig, D-Minn., and Ranking Member of the House Ag Committee, says the onus falls on President Donald Trump and Congressional Republicans.

“Secretary Rollins said one honest thing today: The government is failing the American people. Republicans control the House, Senate and White House. The Trump administration has the legal authority and funds necessary to get November SNAP benefits out the door. They are illegally withholding food from 42 million Americans, and it is shameful,” said Craig in a statement on Friday.

USDA Deputy Secretary Stephen Vaden says the fallout extends well beyond the Capitol. From families losing access to food assistance to disruptions in beef and soybean markets, Vaden warns that the consequences are real and immediate.

In an interview on “AgriTalk,” Vaden accuses congressional Democrats of blocking a “clean continuing resolution” and says the resulting gridlock could harm both consumers and producers.

“If they don’t vote to reopen the government, then 40-plus million SNAP recipients see no extra money added to their benefit cards this weekend,” Vaden says. “We shouldn’t be playing politics with people’s lives and people’s dinner tables.”

SNAP and WIC Funding Hang in the Balance

Vaden says USDA manages to keep the Women, Infants, and Children (WIC) program funded for now by reallocating money from other programs. But the Supplemental Nutrition Assistance Program (SNAP), which costs about $9 billion each month, has no such cushion.

“When it comes to SNAP, we’re talking about more than 9 billion — with a B — dollars,” he explains. “We don’t have that kind of money lying around here at USDA. The contingency fund people talk about is nowhere close to that amount, and it’s meant for natural disasters. We surely don’t want to be spending that and then hoping there’s no hurricane while Congress continues this shutdown.”

Without congressional action, Vaden says 40 million Americans might not receive their grocery benefits at the start of November — a moment when both food demand and household strain typically rise ahead of the holidays.

“That’s 9 billion dollars of groceries,” Vaden emphasizes. “And those groceries include beef, pork and poultry. These are markets that are sensitive to even a 1% shift in demand.”

“A Lump of Coal” for the Holidays

As the shutdown looms, Vaden says the timing is especially painful.

“We’re heading into the holiday season; it’s supposed to be a time of good cheer,” he says. “Unfortunately, Senator Schumer and Representative Jeffries are giving everybody a lump of coal. This needs to stop. We shouldn’t be playing games with people’s lives.”

He adds that USDA can move quickly once Congress passes appropriations.

“You want people to receive their SNAP benefits? It’s real simple,” Vaden says. “Give us our normal appropriations, and USDA will do what it does so well: get those benefits onto people’s cards quickly and efficiently.”

$4 Feeder Cattle: Dream or Reality?

Tue, 28 Oct 2025 14:50:41 GMT

As October draws to a close, U.S. officials are reportedly going to meet with Mexican counterparts this week to talk about reopening the border . The possibility of trade resuming, coupled with President Donald Trump’s comments on lowering beef prices and Agriculture Secretary Brooke Rollins’ announcement to “fortify the beef industry,” sent the cattle market spiraling in recent days.

Despite the downturn, the fundamentals haven’t changed: reduced supply and strong consumer demand are fueling record-high market prices.

“The reduction in available supply and robust beef demand to-date has clearly provided price support,” says Glynn Tonsor, Kansas State University professor of agricultural economics. “Tied to that is the biggest risk in my opinion — beef demand. Anything that erodes beef demand strength, most likely macroeconomic and consumer income in nature in my opinion, will put downward pressure on cattle of all weight classes.”

Tonsor says he never gave $4 much thought until the past couple of years.

“If we adjust for inflation or consider production costs, $4 feeders aren’t what they used to be. It takes $4-plus feeders to generate the net returns we used to get from lower prices,” he explains. “These are profitable prices for ranchers — and it’s about time.”

Tonsor predicts feeder cattle prices to continue under current conditions but does not predict increased profitability due to increasing operating costs.

“The 2025 bull market has been exceptional by every measure,” summarizes Lance Zimmerman, RaboResearch Food & Agribusiness senior beef industry analyst. “500-lb. steer prices are now more than 50% higher than last year, and 800-lb. steer prices are nearly there at just under a 50% price increase year-over-year.”

As a frame of reference, the CME feeder cattle cash index, which captures the average 700 lb. to 899 lb. steer price, averaged $367.08/cwt. the week of Oct. 20. This fall, livestock auction markets across the country have reported lightweight feeder cattle surpassing the $4 mark.

“I think it is entirely possible for feeder cattle to get to $4,” says Don Close, Terrain Ag senior animal protein analyst. “However, I think it will be late summer and fall 2026.”

According to Close, there are three critical components for feeder prices today:
1. Mexican border reopening
2. What disruptions could come to the beef-on-dairy supply
3. Feed prices

“Of that list, Mexico border closure is the real wild card,” he explains. “I don’t see a measurable disruption to beef-on-dairy or feed costs in the near term.”

When Will We Hit the High?

Oklahoma State University’s Derrell Peel, Extension livestock marketing specialist, explains the highest average prices are likely a year or more after heifer retention begins.

“We don’t have any confirmation heifer retention has started to any significant level in 2025,” Peel says. “We have already pushed off any signs of herd rebuilding by one to two years longer than I earlier expected, and we are looking at extending it another year if heifer retention does not start in the fourth quarter. Because the response has been much slower this time than previous cattle cycles, prices have certainly gone higher than I would have expected a year or two ago — though I did expect record-high prices.”

Peel predicts the next expansion phase will be different than the 2014-19 expansion cycle.

“The 2014-19 herd expansion was historically rapid, this current one is historically slow,” he says. “It is a combination of a lengthy list of factors that combine to make this a slow response, and it looks like it will remain a slow, lengthy process.”

Close shares his thoughts on the complexities of the current cycle:

Drought and economic stress. “As an industry, we didn’t fully recognize the severity of the drought as well as the degree of economic stress to the sector,” he says. “The fallout of the 2014 to 2015 price drop is still fresh on producers’ minds, so they have been using the prices of the past three years to get balance sheets in order, pay down debt and now are starting to make capital improvements.”
Producer age. “The average age of cow owners is a factor, so many have used current prices to liquidate and retire,” he says.
Female costs. “Replacement female prices that range from $3,000 to $5,000 restricts and scares some away,” he says. “That is only compounded with the addition of current interest rates.”
Cow size. The escalation in average cow size limits how many cows can run on a given unit of pasture.“
Land. “You hear producers make comments on the difficulty to find additional pasture in order to expand,” he says.

“This cycle has been driven or limited from a combination of all the above,” he says. “Our view is we need to rebuild by 2 to 2.5 million head. Keep in mind, given the escalation in carcass weights, we don’t need as many cattle to produce an equal quantity of beef.”

Close adds his thoughts regarding the impact of last week.

“Given all of the turmoil over the past week it is going to be even more difficult to trigger expansion,” he says. “There is no work around for destroyed producer confidence. I think current market action will further delay expansion.”

Ag Economists’ Monthly Monitor Predicts Bull Market to Continue

Cattle prices are expected to stay high well into 2026, according to the latest Ag Economists’ Monthly Monitor from Farm Journal. Nearly half of agricultural economists surveyed (47%) believe the current bull market in cattle could continue another 19 to 24 months, while another 27% say it could last 13 to 18 months. Only 7% expect prices to peak within the next six months.

“This run isn’t over,” one economist wrote. “At current prices we will see no or little herd expansion.” Another adds the fundamental supply side remains tight: “Clear signals that domestic beef production is increasing may be the key catalyst for a market top.”

“This is a nature of biology to some extent, it takes a while once you even start to retain a heifer for that heifer to produce a calf that then becomes a feeder calf that then becomes a fed calf that then becomes beef at the grocery store itself,” says Ben Brown, an Extension economist with the University of Missouri. “I don’t think we’ve seen necessarily the top of this cattle market yet.”

Even if cattle prices are close to seeing a top, that doesn’t mean prices will crash, he adds.

October Ag Economists’ Monthly Monitor

(Lindsey Pound)

What Could End the Rally?

When asked what might trigger a peak in cattle prices, responses to the Ag Economists’ Monthly Monitor were mixed — but demand destruction and herd rebuilding topped the list. Economists were asked to choose between five options, including:

The reopening of the U.S./Mexico border to Mexican feeder cattle imports
U.S. economic concerns with fallout from trade tensions with China
Removal of tariffs that would resume high levels of beef imports from Brazil
Demand destruction in the U.S. market

One respondent notes, “All of the above are relevant, but clear signals that domestic beef production is increasing may be more important.” Others pointed to a slowing U.S. economy or producers “beginning to hold back replacement heifers” as potential turning points.

“I have no idea what creates the top, but at current prices, we will see no/little herd expansion,” adds yet another economist.

“Beef Prices Can Stay High Longer Than Most Expect”

Economists agree the U.S. cattle market remains fundamentally strong, supported by limited supplies, robust export demand and solid retail prices. However, they caution the same forces keeping prices high — tight herds, high feed costs and inflation — could eventually cool the rally.

As one economist sums it up: “Beef prices can stay high longer than most expect — until consumers finally say ‘enough.’ That’s when we’ll see the turn.”

History in the Making for the Dairy Calf and Heifer Market

Mon, 13 Oct 2025 13:02:07 GMT

Five years ago, you could buy three to five springing Holstein heifers for the price of just one today. Top-quality springers in Turlock, Calif., were bringing $1,100 to $1,225 —compared to $3,500 to $4,250 in the past month.

In Wisconsin, the best-quality springers were as low as $700/head in September 2021. Where the current market will go is anyone’s guess, as few — if anyone — predicted it could reach today’s levels. A newborn dairy heifer calf is now worth about the same as a bred springer in 2021, and beef-cross calves are worth even more.

Here’s further evidence of the past month’s robust prices: Pipestone, Minn., hit a new high for springing Holsteins at $4,550/head, and September potloads of Holsteins springers from California brought $3,500 to $3,800/head, with Jerseys not far behind at $3,050 to $3,300/head.

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Dairy and Beef-on-Dairy Cattle Sizzling Market Has Found a New Balance

Mon, 18 Aug 2025 13:14:31 GMT

The dairy cattle market, according to Jake Bettencourt, manager of Turlock Livestock Auction Yards (TLAY) Video Sales, has been experiencing a period of steadiness over the past six to eight months. While the trend over the past two years has shown a rise in the value of dairy replacements and beef-on-dairy cattle, the market seems to have found its balance. This positive stability is crucial for the dairy industry, allowing for growth and expansion, particularly in the Midwest and upper Midwest regions.

According to Bettencourt, dairy replacements prices seem to have settled, however, beef on dairy crosses not so much.

“The trend for the last two years or better has been the value of these dairy replacements were getting higher and higher,” Bettencourt says. “And for the last six to eight months, it just feels like we’ve kind of found a place to settle.”

A Conservative Approach to Growth
Internally, at TLAY, there has been an ongoing debate about whether to be cautious or optimistic about this upward trend. Bettencourt says there is confidence in the market’s potential to maintain its current levels for another 12 to 18 months. This optimism is based on the demand and supply dynamics observed, especially when it comes to younger replacement cattle, which appear to be valued at a high level.

“There is a growing demand towards younger dairy heifers,” he shares. “So, there’s growth on the horizon.”

This growth matches the need to supply the $8 billion dollars in processing investments forecast to come online in the next few years. Bettencourt says as long as cull cows and beef-on-dairy calves stay at the level they are at, the dairy replacement market will continue to perform well.

“I know it’s hard to wrap your head around it for some people, but these replacements really aren’t that high in relation to everything else,” he says.

Choices and Strategies for Producers
For dairy producers, the decision between focusing on beef-on-dairy calves or concentrating on growing replacements remains complex. Both strategies aim to maximize profitability and maintain herd health. While feed costs have been relatively reasonable, milk prices are not at level that generate significant profit, thus pushing producers to rely on cattle sales to support their operations.

“We’ve talked to some producers who are starting to make a few more dairy heifers,” Bettencourt shares, noting the good corn crop on the horizon will help keep feed costs relatively inexpensive. “However, when you throw in these cull cow and beef-on-dairy checks, that is true income and adding profitability to dairies.”

Holstein Versus Jersey: A Demand Perspective
When it comes to breed preferences, Bettencourt says Holsteins seem to be in slightly higher demand compared to Jerseys.

“There is a higher value of a beef-on-dairy calf that comes out of a Holstein compared to a beef-on-dairy calf that comes out of a Jersey or a Jersey cross, and there seems to be more availability in Jerseys than Holsteins right now,” he shares. “Holsteins are in slightly higher demand right now.”

Bettencourt says this has been the case for a while now. He also says there still is plenty of interest in Jersey and Jersey cross cattle, stating Jersey fresh cows and springers range from $2,700 to $3,200 and Holsteins anywhere from $3,500 to $4,100.

“In fact, I would say, of the expansions that we’re aware of, and we’ve been talking to customers about filling some of those procurements of replacements, it feels like there’s more growth and there’s more expansion where folks are looking for Jerseys and/or crosses,” he says.

Enthusiasm Remains
While challenges remain for those involved in the dairy industry, there is an overarching sense of optimism especially on the income derived from cull cows and beef-on-dairy calves.

Bettencourt says Jersey beef-on-dairy calves are going from $750 to $900 for day-old calves and Holstein beef-on-dairy calves are going anywhere from $1,200 to $1,350. He says a sale that they worked with sold dairy-on-beef cattle that weighed 550 lb. that went as high as $4.31 per pound.

“I mean, it seems like every other week there’s a new record,” he says. “It’s certainly supplementing income for these dairy producers.”

Dan Basse, president of AgResource Company emphasizes the production of beef-on-dairy crossbreds is critical for maintaining the industry’s current output levels.

“It is something that needs to be in every herd,” he says.

As the dairy industry continues adapting to market demands, there is hope that current positive trends will benefit producers for the foreseeable future. This balance offers a promising outlook for growth and stability within the industry.

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Why Aren't High Beef Prices Causing Sticker Shock With Consumers?

Wed, 23 Jul 2025 17:10:10 GMT

Gound beef prices across the U.S. continue to reach new highs. Retail prices for ground beef hit its highest level in history in June climbing above $6 per pound, while steaks were up 8% at $11.49 per pound.

(Bureau of Labor Statistics )

“The record high retail beef price reported by the most recent Consumer Price Index (CPI) has prompted a lot of calls about why prices are record high and whether there is any relief in sight,” says David Anderson, Texas A&M Extension economist for livestock and food product marketing. “While we often write about the great cattle prices for producers who are selling, there is a flip side, and that is consumers who are buying beef.”

Anderson explains reduced slaughter and beef production, especially in the second quarter of the year, cut supplies just as grilling season heated up for seasonal beef demand. The combination led to a spike in wholesale prices and retail beef prices.

Don Close, Terrain senior animal protein analyst, says: “What we have seen so far is consumers have been incredibly loyal to protein collectively, but they have been especially loyal to beef, and beef is actually continuing to gain market there, even at the current prices at the expense of the other protein.”

Wages Are Keeping Pace With Beef Prices

Close says when he correlates the monthly all fresh beef price to hourly wages he found they are in lock step.

“Yes, beef prices have escalated, but beef prices have not risen any faster than the improvement in overall hourly wage,” he explains. “So from the consumer’s perspective, their share of their paycheck committed to beef is essentially the same as it’s been on a comparative basis for years.”

(Don Close, Terrain )

Other contributing factors to beef demand include consumers’ craze for protein and the impact of GLP-1 diets on protein consumption.

Scott Varilek, Kooima Kooima Varilek, says: “I think beef demand has just proven time and time again — hey, consumers want it. It’s a great healthy protein, and I think it’s got a lot of good traction here over the last year of being a good quality source of food.”

High Quality Attracts Consumer Spending

Plus, with 82% to 84% of the beef produced grading Choice or better, the high quality of beef is pushing demand.

“I don’t see any weakness really in the consumers or their spending habits,” says Mike Minor, professional ag marketing. “We actually are eating more Prime meat today than Choice for the first time ever. So, people like their expensive meat still.”

How Long Will High Cattle and Beef Prices Last?

Last week USDA reported average fed cash cattle prices hit the second-highest level in history at $237.78, up 57¢ from the average the prior week.

The high cattle and beef prices continue to be driven by tight cattle numbers, the Mexican boarder closing due to New World screwworm and looming import challenges.

Yet, Close says the role of strong demand can’t be ignored and is likely to continue.

“I think it’s certainly through 2026 and really more realistic somewhere deep into 2027,” he adds.

Anderson explains normal seasonal production and demand would suggest prices falling from recent highs. Evidence from the wholesale beef market over the last couple of weeks indicates lower prices.

“Seasonal price patterns would suggest that there is a chance for a little bit of relief from record high beef prices,” Anderson says. “But, only if we compare to the peak price this summer. Wholesale beef prices are already declining.”

He adds there is a time lag from lower wholesale prices showing up at retail, but lower wholesale prices combined with normal seasonality of various cut prices should lead to the expectation of falling prices in the coming months.

“But, it’s not likely that prices will decline below year-ago levels,” Anderson emphasizes.

Inventory Reports Release on July 25

Close says more will be known about supply levels after the USDA Cattle on Feed and Cattle Inventory reports on Friday.

“While market analysts expect lower placements, marketings and cattle in feedyards than a year ago, the really interesting number will be the number of heifers on feed on July 1,” Anderson summarizes. “The heifers on feed will provide some insight into heifer retention. Also, look for placements in Texas due to the ban on Mexican feeder cattle. The lack of spayed heifers coming from Mexico is important in evaluating the number of heifers on feed.”

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Buckle Up: Here's Why Cattle Prices Are Setting Up for Another Wild Ride in 2025

Fri, 07 Feb 2025 21:47:01 GMT

The cattle markets hit historic highs again to start 2025, and as USDA’s latest Cattle Inventory report showed U.S. beef cattle inventory fell to the lowest level in 64 years , tight supplies and strong demand could push cattle prices to even higher highs in 2025.

USDA’s annual Cattle Inventory Report released Friday shows the U.S. total cattle inventory shrunk another 1% over the past year, with the number of beef cows also down 1%.

Those numbers, along with questions around just how much higher these markets can go, were major topics surrounding the 2025 CattleCon in San Antonio, Texas, (the annual cattle industry convention) this past week.

Signs of a Slowdown?
Economists and market analysts knew the cattle herd was still shrinking, even before the report was released last week. But economists say there are some signs starting to signal that is slowing down.

“We certainly got smaller in 2024. That was actually kind of obvious about a year ago when you looked at heifer numbers,” said Derrell Peel, Oklahoma State University Extension livestock specialist. “If you look at the heifer numbers in this report, we don’t have a lot. And so we’re going to be challenged going forward to stop this liquidation. I think we might stabilize numbers this year, but I think growth is pretty much a long shot at this point.”

“I think we’re getting close to the bottom, as Darrell referenced,” said Don Close, senior animal protein analyst for Terrain, during the U.S. Farm Report live taping at NCBA’s annual convention. “I think the challenge is retaining enough heifers out of the supply that we have to provide the fuel for the build back.”

Calf Crop Was a Big Surprise
Casey Mabry, with Blue Reef Agri-Marketing, said there actually was a surprise in the latest cattle inventory report, and that wasn’t with heifer numbers.

“The biggest surprise to me was really looking at the total calf crop report, because we’re looking at the total cow inventory numbers. I think that probably caught some people off guard, having the calf crop a little bit bigger than what most people’s expectations were,” said Mabry.

Incentives Drive Outcome
With cash cattle hitting records to start 2025 a question on almost everyone’s mind is, can it continue? Mabry said it really depends on if demand can remain steady, since the supply side will remain tight.

“Incentives drive outcome and obviously with grain prices as cheap as they’ve been, and cattle prices as high as they’ve been, we’ve held on to some cattle. So it’s kept the front end of the market really, really tight and it’s kept packers chasing after cattle. So that ran the market $10 or $15 higher, in my opinion, than what we should have on the front end,” said Mabry. “So, it’s going to be really interesting to watch as we go through the back end of this thing. We’ve probably got to work through some stuff right here on the front end. But if the analysts continue to say we’re going to be tighter and demand stays pretty good, we’ll probably see prices exceed where we were before.”

“We’re Still Bullish”
Peel reminds producers there’s a great deal of risk in these markets. He said the markets don’t like uncertainty. With trade concerns and tariff threats, combined with a strong U.S. dollar, the combination is throwing uncertainty into the market.

“We’re very bullish and still bullish in general going forward for average prices,” said Peel. “But we also know that we’re subject to a lot of shocks right now. We’ve seen a couple already. We’re certainly vulnerable. There’s a lot of air below us since this market is so high. So producers really need to still do that risk management. Producers need to think about those marketing windows. If you got caught in a shock in one of those, it could really be devastating to you.”

Close has similar advice. He said with the development of insurance products, plus futures and options contracting, there are several ways for producers to manage risk today.

“At the price level we’re at, and just any measured retracement in the market, it could take you out of the game. At these price levels, it is absolutely imperative to have some kind of price risk management program in place,” said Close.

“I think you just need to run with what I call a keen sense of paranoia,” said Mabry. “I mean, be bullish, be excited about the market, but don’t get overly euphoric. We’ve got to remember back a short three or four years ago, we were all in the doldrums and very scared. And there’s a lot of people that were telling their kids to get into a different business. And now all of a sudden, we’re all jumping on the bandwagon of cattle and getting excited about this. So, we want to make sure that you guys are running your businesses like businesses and not gambling on cattle.”

Your Next Read:

Are More Record Cattle Prices Ahead in 2025?

U.S. Beef Cattle Inventory Falls to the Lowest Level in 64 Years

Fri, 31 Jan 2025 21:09:20 GMT

Shrinking cattle supplies continues to be the story in the cattle market and part of the reason cattle prices continue to climb. USDA’s annual Cattle Inventory Report released Friday shows the U.S. cattle inventory shrunk another 1% over the past year, now at 86.7 million head. And when you look at just the number of beef cows, that inventory fell 1%, now sitting at 27.9 million head.

Other highlights in the January Cattle report include:

Of the 86.7 million head inventory of all cattle and calves, cows and heifers that have calved totaled 37.2 million
The number of milk cows in the U.S. increased slightly to 9.35 million.
U.S. calf crop was estimated at 33.5 million head, down slightly from previous year.
USDA NASS says the number of cattle on feed were at 14.3 million head, down 1% from 2024

All 👀 were on the January #cattle report today. Here's a look at the #beef cattle inventory over the last 65 years 🥩 . 🇺🇸 Jan inventory was the lowest since 1961 👇👇. At @TerrainAg we have amazing protein economists on the team to help #FarmCredit customers, see their work… pic.twitter.com/weg8KrjcbW
— John Newton (@New10_AgEcon) January 31, 2025

“The big takeaway as we see it was the notable upward revision of last year’s numbers, and we expected that. The past year’s kills have simply been larger than implied by last year’s survey. I think most in the market anticipated that. Not sure if the Algo traders had,” says Arlan Suderman, chief commodities economist with StoneX Group.

“Everything looks pretty in line until you get to that beef replacement heifer number, and I feel like that’s kind of a little bit of a surprise as we’ve been talking about heifer retention,” Scott Varilek, Kooima Kooima Varilek, Sioux Center, Iowa told AgDay’s Michelle Rook. “We’re thinking it’s happening and the last cattle on feed report showed a few less heifers on feed but with a 101 % estimate coming in at 99% we’re still off of year ago levels and still not seeing that rebuild in the cow herd.”

Last year’s USDA Cattle Inventory Report showed the smallest cattle herd in 73 years . And with no strong signs of rebuilding underway, along with strong prices providing no incentive to retain heifers, agricultural economists expected U.S. cattle inventory to shrink even more since last year, which is exactly what USDA revealed on Friday.

“The next takeaway is that we have not started rebuilding the breeding herd. As such, perhaps we have a little higher numbers over the next half year or so, but then things get tighter, and more significantly tighter once we actually do start holding back heifers,” says Suderman.

Higher Highs?

Cattle prices continued to hit records this week. And with no signs of those record prices slowing down, it’s a question of how high these prices will actually go.

According to AgDay’s Michelle Rook, the cattle market continues to smash new records in both the futures market and in cash cattle trade. She reported a strong fed cash cattle market, combined with the border still being closed to Mexican feeder imports has also pushed both live and cattle futures to all-time highs.

Is there any sign of a slowdown in the market, or is a top close? Suderman says fundamentally, the signs show supplies are tight, but the demand piece is a concern.

“Unfortunately, those signs usually come after the top has traded, which is why so many feeders are so nervous,” he says. “Fundamentally, things will still get tighter. But it still comes to the consumer. Consumer confidence pulled back in January, which is a red flag. Headlines are filled with scary scenarios that a trade war over tariffs could bring, which tends to further reduce consumer confidence. That doesn’t bode well for the consumer paying up for the higher cuts of meat at these price levels.”

What Will It Take for Producers to Start to Rebuild?
What would change a producer’s minds and give them confidence to grow their herds again? That’s exactly what we asked in the latest Ag Economists’ Monthly Monitor, which is an anonymous survey of nearly 70 ag economists from across the country. While some said it will just take time, others pointed to the economics of strong cow-calf returns, weaker fed cattle prices and lower prices at the sale barn.

January Ag Economists’ Monthly Monitor

(Lindsey Pound )

Other economists said:

“Today’s high prices are certainly incentive, along with the expectation of moderate feed costs.”
“Government policies, global demand, price cycle”
“Better spring forage supplies could be the most important factor in growth. More quality labor could be critical, too.”
“Confidence that the general economy outlook is positive and that there are unlikely to be negative policy shocks. And, of course, there has to be adequate forage.”
“Improved weather pattern in the West, along with profitable margins.”

What Impact Will Tariffs Have on Ag Markets and the Broader Economy?

Mon, 02 Dec 2024 17:23:00 GMT

President-elect Trump has threatened to place 25% import tariffs on Mexico and Canada and 10%a additional tariffs on China on day one of his second term.

What will this mean for the agricultural markets?

Jim McCormick with AgMarket.Net says Mexico, Canada and China are the top three export customers of the U.S. and account for 40% of total exports.

Mexico has already threatened retaliation, so another trade fight will be devastating for agricultural markets.

McCormick says during the trade war in 2017-18 prices for agricultural commodities, but especially soybeans, took a tumble due to retaliatory tariffs from China.

He says the agricultural markets have handled the threat well because of the flush of export demand for many ag products that the market is already seeing.

China has been front loading their purchases of U.S. soybeans and Mexico has been buying U.S. corn in anticipation of the tariffs starting after January 20.

Weekly exports on Friday were a marketing year high at 91.5 million bu. and China accounted for 40 million of that total.

Additionally on Friday morning private exporters reported flash soybean sales of 30.9 million bu. to unknown destinations and another 5.6 million bu. to unknown both for 2024-25.

Corn exports were at 41.8 million bu. for the week ending Nov. 21 and 16 million bu. went to Mexico.

Additionally, President-elect Donald Trump’s trade strategy, particularly his proposed tariffs on imports from Mexico, Canada and China, appears to be more of a negotiating tactic than a straightforward economic policy. Analysts interpret this approach as part of Trump’s broader strategy to leverage tariffs as tools for negotiation rather than strictly for trade regulation or economic improvement.

However, if a trade war were to happen McCormick says there could also be negative impacts for the broader economy as prices for all imported goods would rise for consumers.

Additionally, the U.S. imports a large amount of crude oil from Canada and so a 25% tariff could raise gas prices and the U.S. auto industry is reliant on imports of parts and autos from Mexico.

All this could drive inflation back up which is negative for consumers and businessses.

At a time when the FOMC is trying to cut interest rates a return of inflation could force the Fed to change course and maybe even raise interest rates.

A Possible Recession Still Hangs Over the Ag Economy, But Positive Shifts Are Starting to Surface

Fri, 01 Nov 2024 23:19:58 GMT

In September, 75 percent of ag economists warned of an impending agricultural recession. October brought slight optimism to the Ag Economists’ Monthly Monitor, attributed to rising U.S. corn export demand and forecasts about cattle herd rebuilding. Yet, economists remain cautious about the potential impact of the upcoming election.

Harvest is winding down across the Midwest, and some farmers saw a record harvest pace in 2024. Harvest is typically the time of year the market sets harvest lows, but this year, commodities, like corn and wheat, came to life.

“I think over the last month, we’ve seen a little bit of a rebound or stabilization of prices, if you will. Some of that’s simply been fund short covering that is supported, some of it is a little better long-term picture for wheat and for corn, although for soybeans, it’s still looking somewhat bleak long-term,” said Arlan Suderman, chief commodities economist with StoneX Group.

The latest Ag Economists’ Monthly Monitor, which is a survey of nearly 70 ag economists and conducted by Farm Jounal each month, reflected that with short-term sentiments among economists seeing a slight improvement, but a bigger jump when asked to compare them to last year.

“We could have told you two to three years ago that, after a period of high prices, eventually we were going to have a recovery in production and that was going to suppress prices probably more than input costs. We knew that. I think when you take into account expectations heading into the year, has it deteriorated more than expectations? Probably not. We just know that we’re worse off today than where we were,” said Ben Brown, an agricultural economist with the University of Missouri.

Each month, the Monthly Monitor asks economists to list the factors that could impact crop prices over the next six months. In the latest survey, economists said:

South American weather
U.S.-China trade relations
Election outcomes
Global geopolitical risks
Biofuel demand

The Biggest Wildcard: South America

“The biggest thing that will l impact the markets is going to be South American weather. What happens in Brazil and Argentina and what’s the size of the soybean crop they’re going to get? Right now, it is raining. The crop is being planted late. Our people on the ground in Brazil are expecting a big crop if these rains continue,” Suderman said.

While the soybean crop could see suppressed prices if Brazil grows a big crop this year, the later-planted crop could eat into the supplies of corn.

“Even where we’re at today could have an impact on that second-crop corn, given that I anticipate that we’re going to see a very robust corn export picture even without a shrinkage in that second-crop Brazilian corn. I still think there’s an upside potential for the corn market, and it’s going to be based on the size of that second-crop corn in Brazil,” said Brown.

A Recent Surge in Corn Sales

The corn export demand picture has been strong, which is thanks to a surge in sales to Mexico. T hat’s one significant factor currently fueling corn prices .

“If we didn’t have it, corn prices would be a lot lower today than where they are,” said Brown.

“When we look at the export pace that we’re on right now, it’s stronger than what we normally have at this time of year, and it’s largely been because of Mexico. Mexico has been a very aggressive buyer of U.S. corn here, at what they perceive to be the harvest lows,” Suderman said.

Outlook for Livestock and Dairy

The October Monthly Monitor asked economists to list the factors that could impact livestock and dairy prices over the next six months. Economists said:

Herd size and tight cattle supplies
Outcome of the election
Health of general economy in the U.S. and consumer demand changes
Disease issues (H5N1, etc.)
Developments in China and other major importers
Consumer demand given high meat and dairy prices
Weather in the Corn Belt and Great Plains

When Will Beef Producers Start to Rebuild Their Herds?

October Ag Economists’ Monthly Monitor

(Lindsey Pound)

The October survey also asked economists when they think producers will start to rebuild their cow herds:

50 percent said in the first half of 2026
30 percent think it’ll happen the second half of 2025
20 percent said in the first half of next year.

“We’ve seen a slowdown of cow slaughter. That’s step one, but that’s not rebuilding,” said Suderman. “It really comes down to when do we turn this weather pattern around and start getting the pasture, the feed necessary in the West in order to incentivize rebuilding the cowherd? That is the problem right now.”

Other than weather, what else is preventing producers from starting to rebuild? Economists say it’s the average age of producers, replacement costs and heifer prices.

“I also think there is this economic pull on producers of ‘how can I justify retaining these heifers when they’re bringing the prices that they are?’” said Brown.

The Inflation Factor

When you look at what could impact both livestock and row crop producers over the next six months, a major wild card is interest rates. The October survey asked economists how much farm interest rates need to fall to find economic stability for farmers, and 46% said 2%.

Ag Economists’ Monthly Monitor

(Lindsey Pound )

But even with the Fed cutting the benchmark interest rate last month, interest rates have actually gone up, not down.

“The two-year break-even inflation rate is what the market trades. It’s expectations of what inflation’s going to average over the next two years. And over the last six weeks or so, we have seen it jump a full percentage point. That is a significant short-term jump, saying that reinflation fears are coming back in a hurry,” Suderman said.

Suderman points out the Fed can influence mid- and longer-term rates, but the agency can’t control them. And it’s concerns about inflation that are pushing those rates back up again.

“That could all change over the next couple of weeks, or it could be reinvigorated. I think longer term, what I’m looking for is a return to the interest rates that we saw in the ‘90s and early 2000. But I think there’s going to be a lot of volatility in getting there,” Suderman said.

Election Impact on Ag

October Ag Economists’ Monthly Monitor

(Lindsey Pound)

Ahead of the election, the Monthly Monitor asked economists which presidential candidate will be more effective at taming inflation. Fifty-three percent said Donald Trump.

When it comes to providing more certainty on farm policy and crop insurance, 61 percent of economists said Trump will provide more certainty.

However, when looking at policies that benefit biofuels, 53 percent of economists said Kamala Harris.

Today, there is no clarity on 45Z that’s causing soybean processors like Cargill and Bunge to possibly slow or even idle production by the end of the year.

“We have industry looking to shut down production of biofuel. If we don’t get the 45Z requirements here released soon, and that doesn’t look likely, unfortunately, that’s going to hurt demand for soybean crushing for soybeans per se,” Suderman said.

“The fact that we don’t have those today, I think, is impeding investment in the sector. And people are asking for that before they spend millions of dollars to do that. And I think that has been a hiccup,” said Brown.

Role of the Federal Government

Heading into a crucial election with not just the presidential race, but also the House and Senate, the October Ag Economists’ Monthly Monitor asked, “What is the most important role of the federal government?”

Forty-six percent of economists ranked financial aid as the top priority. Nearly 43 percent said it’s passing a farm bill.

October Ag Economists’ Monthly Monitor

(Lindsey Pound)

“There’s all this discussion that the safety net is inadequate relative to commodity programs, and there’s the potential for some rather large ARC and PLC payments to come,” said Brown. “But are they too late? That’s the question. Is it too late in the cycle? Does any type of ad hoc support through a farm financial package bridge that gap?”

The October survey of economists also asked them to weigh in on the fate of the farm bill. The majority of economists think Congress will pass a new farm bill in 2025, but 21 percent think it could be 2026 before it crosses the finish line.

Farm Bill Ag Economists’ Monthly Monitor

(Lindsey Pound )

Conclusion

The October Monthly Monitor reflects cautious optimism in certain areas of agriculture, marked by export strengths and potential price recoveries. But the optimism is shadowed by long-term rebuilding challenges, weather dependencies and the impact of the upcoming election.

The Recent Boom in Livestock Profitability is Masking a Harsh Reality of the Overall Farm Economy in 2024

Tue, 15 Oct 2024 16:27:48 GMT

USDA’s revised Net Farm Income projections released in early September showed net farm income will fall $6.5 billion or 4.4%, which is a major improvement from projections released in February suggesting it would fall 26%. However, economists argue those revised figures come with some misconceptions about the health of the ag economy today, and the the recent boom in livestock profitability is hiding the reality what’s really happening on row crop farms across the U.S. right now.

The lates t Ag Economists’ Monthly Monitor from Farm Journal showed a slight rise in optimism compared to the previous month, but economists remain worried about the current state of the agricultural economy when compared to last year.

It’s clear the ag economy is dominated by two very different stories this year. The livestock sector is better than what USDA forecasted in February, but the crop sector is worse.

“The margins that farmers are facing on average are really a tough place to be in for 2022 to 2024,” says Krista Swanson, lead economist for the National Corn Growers Association (NCGA). “According to USDA, the cost to produce corn dropped 5%, but the price was down 37%. And when we look at those average numbers from USDA, looking at cost of production for corn prices and yield, that comes out to average losses of $125 per acre.”

Revised Projections on Net Farm Income for 2024

USDA’s revised Net Farm Income projections were released in early September, and the updated figures were surprising to many economists. The new numbers show net cash farm income for the 2024 calendar year will fall $12 billion, which is down about 7% from 2023, and net farm income will fall $6.5 billion or 4.4%. This is compared to projections released in February of this year which suggested net farm income would fall 26%.

The latest Ag Economists’ Monthly Monitor survey, which is an anonymous survey of nearly 70 economists, asked those economists, “What was the most interesting thing you noticed in USDA’s September Farm Income update?” Economists weren’t surprised the livestock picture improved from the February report, but they pointed out the following:

“Increase in farm asset value and equity.”
“The ‘dog that didn’t bark.’ Many people expected a more dire picture in 2024, but the drop in crop prices was only a little more severe than earlier expected, and the necessary downward correction in estimates of 2024 feed costs (the earlier estimate was unreasonably high, given what was known about feed prices at the time) helped moderate overall 2024 costs. There were also adjustments upward in receipts for crops other than grains and oilseeds that boosted the receipt and income figures.”
“The simultaneous downward revision in the net farm income estimate for 2023 paired with the upward net farm income forecast for 2024, causing the year-over year 2023-2024 decline to shrink substantially.”

Potential Recession in the Agricultural Sector

The survey also asked if agriculture is on the brink of a recession, and there was no clear consensus as economists argue the livestock sector and the row crop sector are two very different stories. Seventy-five percent said yes, agriculture is on the brink of a recession, which is up from the 56% who responded that way in the previous month’s survey. However, 54% of economists argue agriculture is already in a recession, with some economists pointing to only the crop sector seeing recession concerns.

“I think yes, and it depends on how you define a recession. I define a recession as this is one of the worst years we’ve seen in the last 20. So my short answer to the question is yes. Just looking at where the price is currently at, this is about the worst year since 2007, which was the start of the ethanol boom,” Langemeier said.

It’s clear not all economists are in agreement, but when asked to expand on why, economists said:

“Financial health is weaker but still pretty strong.”
“For select crops and regions of the country farmers are facing significant financial pressure.”
“The cost-price squeeze facing the crop sector is severe and will have larger implications if it persists. Many crop producers were profitable in 2021 and especially 2022, so they had some ability to absorb a more challenging environment over the last two years. But that ability is running out, especially for producers who rent much of the land they operate or who are heavily indebted.”
“Over-production globally and exports are soft, while biofuel policy does not support consumption of surplus.”
“The farm structures across all farms does not suggest a recession. A higher portion of farms have off-farm income to support cyclical changes. Most farms have healthy balance sheets (thanks to increased land values), and there are positive returns in certain sectors of the industry supporting those that are diversified. Areas of the ag economy that will struggle are those that are highly or fully concentrated in row crops, are full-time commercial operations between 1,000 and 2,000 acres, and have a high proportion of cash-rented acres.”
“Highly-leveraged producers are feeling economic pain already. If supplies continue to remain large, lower prices may last for a longer period of time and could result in highly-leveraged producers leaving the industry.”
“The livestock sector, specifically cattle and dairy, is performing well relative to hogs and the crop sector.”

September Ag Economists’ Monthly Monitor

(Lindsey Pound/Farm Journal)

The economists were even more divided when it came to answering whether the ag economy is already in a recession. Economists said:

“The challenges faced by the crop sector are at least partially offset by a more positive story for cattle producers, in particular. For other animal sector producers, the drop in feed costs has made 2024 a little better than 2023.”
“Farmers are already feeling the pinch, and they are looking for ways to slash expenses.”
“Lenders in our state are very concerned about the outcomes for this year and the outlook for next year.”

Poor Margins for Pork Producers

Beef and dairy producers may be looking at better margins for 2024, but even with improved feed costs, pork producers are still faced with potential losses this year.

Iowa State University estimates U.S. pork producers will see an average of $13 per head loss during 2023-2025, which would be the worst three-year period for profitability in hog production in history, even worse than 1997-1999 ($12 per head loss).

The 1997-1999 time period had a dramatic impact on the hog industry and caused mass consolidation and more vertical integration.

The September Ag Economists’ Monthly Monitor asked economists: “What is the potential impact to the industry? And how is it different than what we saw in the 1990s?”

Some economists responded by saying they expect even more consolidation to take place today, but other economists say with so much consolidation already shaping the pork industry, this time period will be different.

“In the short run: not much - minimal increase in consolidation long run: some supply adjustment - depends on who has the deepest pockets.”
“Fewer hog producers.”
“The industry is already much more concentrated than it was in the late 1990s.”
“2023 was particularly difficult for the industry. The situation remains challenging, but lower feed costs have at least reduced losses. Unless demand strengthens, there will eventually need to be a contraction in supplies to generate a more “normal” rate of profitability.”
Leads to more concentration. A similar effect occurred in the 1990s

Livestock and Dairy Prices Outlook for the Next Six Months

Cattle and dairy prices are stronger than crops. The survey asked economists, “What factor(s) are you watching that you expect will impact livestock and dairy prices in the next six months?” Economists said:

The outcome of the 2024 election
Drought
Health of the ag economy
Meat demand at restaurants
Feed costs
High beef prices and the impact on beef and pork demand
If milk supplies remain weak, it will continue to lead to strong milk prices

Key Factors Affecting Crop Prices

The survey then asked economists to list the factors they’re watching that could impact crop prices over the next six months. Economists responded by saying:

Final 2024 U.S. crop production numbers
South American weather
Fall planting in South America (timing and acreage)
China’s economy/geopolitical tensions
Policy changes after the election (tariffs, impact on trade and biofuel policies)

Tariffs and Trade: A Continued Debate

The September Ag Economists Monthly Monitor, a Farm Journal survey of nearly 70 ag economists, revealed a mixed view of the presidential candidates’ impact on trade.

(Lindsey Pound)

Another area is exploring new export demand. Ag economists pointed out the outcome of the election could impact both crop and livestock prices. The September Monthly Monitor asked economists if the two presidential candidates would help or hurt trade.

55% said a Harris administration would hurt trade.
86% percent of economists said a Trump administration would hurt U.S. trade.

“Farmers are definitely concerned about trade,” says Langemeir, who helps author the Purdue University/CME Group Ag Economy Barometer and is one of the economists surveyed by Farm Journal each month. “We don’t ask specific questions related to tariffs in the Ag Economy Barometer, but one question we do ask is if they expect exports to increase, decrease or stay the same? Really, this is the most pessimistic they’ve been for about five years with regard to trade.”

Tariffs are a tool both the former Trump administration and the current Biden/Harris administration have used.

During the first presidential debate, Trump didn’t waver from his staunch stance on tariffs and trade, reiterating his plan to use tariffs to protect U.S. industries and increase revenues. Trump reinforced his plan to impose a 10% tariff on all imported goods and a 60% tariff on goods from China.

During the debate, Harris stated tariffs are essentially a “sales tax” on American households. The Biden/Harris administration recently extended the Trump-era tariffs, while also imposing its own set of tariffs in May. Biden directed the U.S. Trade Representative to “increase tariffs under Section 301 of the Trade Act of 1974 on $18 billion of imports from China to protect American workers and businesses.”

“That’s why I get really worried when both candidates start talking about tariffs. It’s really uncharted waters, if you will. There’s already the perception we’re struggling a little bit with trade. As we enter these uncertain waters, we’re going to struggle more,” Langemeier explained.

Do Tariffs Work?

The controversy over tariffs and whether they’re a good trade policy tool is long-standing. The September Ag Economists’ Monthly Monitor asked economists: “Do tariffs work in trade policy?” Economists views were mixed:

“Tariffs can work in trade policy — that’s why nations continue to use them. The complex part that extends beyond the tariff action is potential long-term repercussions that can result from trade-flow changes.”
“In limited cases, typically only if they result in a policy response in the targeted country. Much of the time, tariffs are like cutting off one’s nose to spite one’s face.”
“Tariffs provide short-term gains but have always failed relative to free trade in the long-term.”
“Absolutely, when properly applied.”
“Not over the long-term. They tend to affect who gets to supply different markets around the world.”

The September Ag Economists’ Monthly Monitor also asked: “When tariffs are used as a ‘tool’ in trade, who pays the tariff?” Not all economists were aligned on that answer either, saying sometimes it’s farmers and consumers, but it can also be the exporting countries.

“When the U.S. imposes tariffs on imports, importers in the U.S. pay taxes to the U.S. government on their purchases from abroad. When another nation imposes tariffs, importers in that nation pay import taxes to their government on their purchases from abroad. Often, when a tariff is implemented, another nation retaliates, and you end up with importers in both nations paying the price on whatever products the tariffs apply toward.”
“If an importing country places a tariff on the exporting country, producers in the exporting country and consumers in the importing country both lose (i.e., receive lower and higher prices, respectively). Conversely, producers in the importing country and consumers in the exporting country win (i.e., receive higher and lower prices, respectively).”
“In the short run, consumers who purchase goods with a tariff might see higher prices if the tariff is not absorbed elsewhere. In the long run, the tariff might result in changes to the supply chain that result in higher prices but also create other economic opportunities in America (e.g. reshoring of domestic manufacturing).”
“The correct economist answer is ‘it depends.’ Tariffs drive a wedge between prices in the exporting country and in the importing country. It depends on the circumstances of particular markets and how much is reflected in higher prices in the importing country and reduced prices in the exporting country.”
“Both the exporting nation and the importing consumer pay some portion of the tariff depending on who has more flexibility to adjust to a trade barrier. If exporting countries can easily switch to supplying other markets, they won’t have to ‘pay.’ If consumers can easily find cheap substitute goods, they won’t have to pay.

Conclusion: A Complex Road Ahead for U.S. Agriculture

As U.S. agriculture faces multiple challenges, from high input costs to volatile prices and geopolitical concerns, farmers are forced to find new ways to adapt. Economists emphasize the need for new demand sources, particularly in exports, to help stabilize prices and support the sector moving forward. With the outcome of the 2024 election and global market dynamics set to play pivotal roles, the agricultural sector will need to remain flexible to navigate these uncertain times.

Your Next Read: Presidential Poll Results: How Farmers and Economists View Candidates’ Impact on Agriculture