CAB Market Update
As Certified Angus Beef (CAB) wrapped up 2025 and the calendar turned to 2026, two holiday-shortened weeks of federally-inspected cattle harvest pulled head counts down to 425,000 head and 474,000 head.
The first full week of December’s 553,000 head was not a decisive return to pre-holiday volume as the week’s total was the second smallest since mid-October.
Fed steer and heifer volume was 445,000 head, compared to fourth-quarter, non-holiday weekly averages of 464,000 head and all fourth-quarter weeks at 436,000 head.
Looking to the first quarter, feedlot turnover rates should continue on a slow pace with added days on feed remaining a theme, and the expectation is for smaller weekly totals.
Fed cattle expected to decline
Assuming the U.S. border reopens, CattleFax is projecting a 600,000 head decline in fed cattle harvest for the year. This eventuality is not a given, while a change to the current policy would not increase fed cattle supply until the second half of the year.
Adding disincentive to increase production volume, packer margins are estimated to be at more than $200 per head in the red, according to latest reports.
The comprehensive carcass cutout value began the year with the first week’s average at $353 per hundredweight (cwt), eight percent higher than the January 2025 average.
The first three full weeks of 2025 featured fed cattle harvest volume of 485,000 head.
Continuation of smaller weekly head counts is likely to hold wholesale boxed beef prices on a higher plane.
Midway into January, seasonal focus has shifted from middle meats toward the more favored winter end-meat roasting cuts.
Wholesale cut prices are reflecting major downward corrections with ribeyes and tenderloins dipping below spot prices of the last two years.
It’s yet to be seen if retailers will take advantage of the opportunity to buy a volume in the spot market to entice consumers to the meat case.
Price speaks volumes
Whether it’s calves, fed cattle or boxed beef, staying current with relevant price information has been an everyday task in the beef sector. Volatility is a tired term in the modern era, even with the exclusion of major industry news.
Running headlong into 2026, the cattle market is ablaze with feeder cattle generating a highlight reel of prices in the first two weeks of January. It’s as if the industry awoke on Jan. 1 to realize projected declines in feeder calf supplies were suddenly truthful.
On the end-product side of the equation, there have been recent seasonal undulations as new record carcass weights were charted, accompanied by a record share of 87 percent Choice and Prime carcasses for the past four weeks.
CAB brand certification has been steady for the period, near 37 percent of Angus-type carcasses qualifying. As carcass weights touched new records in the fourth quarter, a disproportional number of those were excluded from the brand as they exceeded the 1,100-pound weight limit specification.
With U.S. Department of Agriculture Prime carcass tonnage – including CAB Prime – record-large again in 2025, the industry revisits price spreads up and down the quality grade and branded product offering.
Even as Prime carcass supply increased 11 percent on the year, the annual average Prime premium increased to $39.04 per cwt above commodity Choice, up $4.72 per cwt for the year. The record $56.21 per cwt annual Prime premium, set in 2022, is unlikely to be tested again anytime soon.
CAB carcass counts were the fifth largest in brand history for Fiscal Year 2025 and just three percent fewer than a year ago on the calendar year.
Yet, the year’s advance of $5.59 per cwt in the cutout premium for traditional CAB carcasses was up 36 percent over 2024 to average $20.73 per cwt, according to Urner Barry.
Calculated Select carcass tonnage slipped nine percent on the year while the discount deepened from $17.04 per cwt to average $21.33 per cwt. Recent seasonality has brought focus to the Choice-Select spread dipping briefly below one dollar per cwt in early January.
However, the year-long trend brings to light the big picture of further demand destruction for Select carcasses even as they are less prevalent in the supply chain.
The strong price spread trend is a clear indicator for the industry in 2026. While the tightest fed cattle supplies in the cycle are projected this year, consumer demand has issued directional support tight supplies do not necessitate narrowing of price differentiation for quality.
Importantly, more and more retail and foodservice firms are grasping a satisfied beef customer is a loyal customer. This starts with a marbling-rich carcass meeting specifications.
Paul Dykstra is the director of supply management and analysis at CAB. He can be reached at pdykstra@certifiedangusbeef.com.
