What beef producers should know as cattle prices soar
Cattle markets continue to march higher in 2026, driven by limited inventories and strong demand.
Lightweight calves and stockers were more than 50 percent higher in late February than one year ago, with heavy feeder prices up over 40 percent year-over-year. Fed cattle prices are up about 24 percent year-over-year.
Wholesale boxed beef prices jumped sharply in the last week of February, as strong beef demand continues to fuel higher prices.
The January cattle inventory numbers confirmed the industry’s continued contraction. The all cattle and calves inventory is currently 86.16 million head, down nine percent from the cyclical high in 2019.
The Jan. 1 beef cow inventory is 27.61 million head, the smallest beef cow herd since 1961. It is down 12.7 percent, or 4.03 million head, in the past seven years.
This year is likely to be the cyclical inventory low, marking 12 years since the previous low in 2014. Limited cattle inventories will continue to be a major driving fundamental in cattle markets in 2026 and beyond.
The 2025 calf crop was 32.9 million head, the smallest total calf crop since 1941. The calf crop has gotten smaller for seven years after peaking in 2018.
Feedlot and beef production trends
Feedlot inventories continue to decline, with February’s Cattle on Feed Report showing 11.51 million head, down 1.8 percent year-over-year. This is the 15th consecutive month of declining feedlot totals.
Total feedlot placements decreased 6.7 percent in 2025, while marketings dropped 5.4 percent year-over-year. Decreasing feedlot production resulted in fed slaughter falling 5.5 percent, leading to a total slaughter decrease of 6.4 percent for the year.
Despite a share increase in steer and heifer carcass weights – up 24 pounds in 2025 – total beef production dropped to 26 billion pounds, down 3.6 percent year-over-year. Carcass weights of steers averaging 955 pounds and heifers averaging 871 pounds partially offset decreased fed slaughter.
Beef production has decreased 8.1 percent since its peak in 2022, and it is projected to decrease another three to 3.5 percent in 2026, reaching its lowest level since 2015.
Non-fed beef, which supports ground beef production, saw a significant drop of 14 percent in 2025. Total cow slaughter decreased 10.5 percent last year, with beef cow slaughter down 17.6 percent.
Total non-fed – cow plus bull – beef production decreased eight percent last year, and slaughter is down 24.7 percent, with beef cow slaughter alone down 40.5 percent since 2022.
Non-fed beef supplies are the tightest in decades, contributing to record-high ground beef prices.
Beef trade update
Beef exports fell 14.3 percent year-over-year in
2025, with the largest decline in the China and Hong Kong market, down 52.3 percent for the year and 68.9 percent over the past nine months due to tariffs and trade wars.
South Korea became the largest export market for U.S. beef, slightly ahead of Japan. Mexico moved into third place, while Canada ranked fifth.
Beef imports rose 18 percent year-over-year – primarily lean processing beef used for ground beef production. Imported lean beef helps support fed cattle values and keeps the ground beef market competitive in fast-food markets.
Australia and Brazil remain the largest sources of beef imports, along with Canada and Mexico. Despite considerable political focus, Argentina accounted for only 2.3 percent of beef imports and will remain a minor source of beef imports in 2026.
Looking ahead to tight supply, volatility
Higher cattle and beef prices are expected to persist in 2026, with inventories stabilizing but little or no growth anticipated.
A slight increase in beef replacement heifer inventories on Jan. 1 suggests perhaps momentum is slowly developing for herd rebuilding.
Feeder cattle supplies will remain extremely tight, aggravated by reduced Mexican feeder cattle imports and increased heifer retention.
Cattle and beef markets will likely experience continued volatility because of political factors, animal health threats, Mexican border uncertainties and potentially more industry infrastructure adjustments.
Producers should prepare for ongoing challenges while capitalizing on strong market conditions.
Derrell Peel is the livestock marketing specialist for Oklahoma State University Extension. This article was originally published by the Missouri Ruralist on March 2.
