Cattle producers could continue to see strong prices as tight supplies, steady beef demand and a slow rebuilding of the nation’s cattle herd keep pressure on the market.
David Anderson, Ph.D., a Texas A&M AgriLife Extension Service livestock marketing economist and professor in the Texas A&M Department of Agricultural Economics, recently discussed the cattle market during the Texas A&M Beef Cattle Short Course.
According to Anderson, U.S. beef production is expected to decline this year and next year and could remain lower into 2028. Drought conditions across much of the Great Plains have made it difficult for producers to begin significantly expanding their herds.
Higher production costs, interest rates and market uncertainty involving trade, tariffs, pests and New World screwworm concerns are also contributing to a slower recovery.
Rebuilding the Herd Will Take Time
While there are indications that cattle producers may be beginning to rebuild their herds, increasing cattle numbers is a lengthy process.
One potential source of additional feeder cattle is Mexico. The reopening of ports for Mexican cattle imports could gradually add animals to the U.S. supply. However, those cattle are not expected to have a major immediate effect on beef supplies or retail prices because it takes considerable time for feeder cattle to reach market weight.
Even with additional imports, cattle supplies are expected to remain relatively tight.
The USDA’s July cattle report indicated approximately 100,000 heifers had been retained, providing some evidence that producers may be beginning the process of rebuilding breeding herds.
However, strong current cattle prices can make that decision difficult. Producers must weigh the value of selling heifers at today’s prices against retaining them for breeding and waiting for future calves to generate income.
Strong Prices Could Continue
Tight cattle supplies combined with continued consumer demand for beef are expected to support cattle prices.
Fed cattle were averaging approximately $230 per hundredweight, with projections suggesting prices could reach between $243 and $245 per hundredweight next quarter.
Looking further ahead, fed cattle prices could reach approximately $250 to $256 per hundredweight during 2027.
Prices for lightweight feeder cattle weighing between 500 and 600 pounds have recently declined from approximately $476.24 to $437.44 per hundredweight. However, those prices are projected to rebound to approximately $459 to $467 per hundredweight by the second quarter of 2027.
Another factor affecting future beef supplies is increased production per animal. Cattle are producing more pounds of beef per head than in previous years, meaning the national herd may not have to return completely to previous population levels to produce similar amounts of beef.
For cattle producers, current market conditions continue to offer strong selling opportunities. For consumers, however, limited cattle supplies and continued beef demand mean relief from high beef prices may be slow to arrive.
With drought, production costs and other uncertainties limiting rapid herd expansion, the cattle market could remain strong well into 2027 and potentially beyond.
