Global AgriTrends

11.07.25

Making Sense of the Cattle Crash

The last two weeks have seen a colossal crash in cattle futures prices. Trump’s comments about expanding Argentine beef quotas four-fold started the collapse. And in true panic-fashion investors ran for the doors driving live cattle futures down -$30/cwt and feeders down -$60/cwt. The value of U.S. cattle on feed dropped by around $5 billion during this crash. And feeder values dropped even more depending on how yearlings and calves are valued against the futures contracts.

So is the bull market over? Some analytic firms and analysts say YES. I say NO. Futures contracts are key components of market values and cattle prices. But the most important question to ask now is, “What has fundamentally changed regarding supply and demand of beef and cattle?” The answer is nothing.

Argentina has only filled 65% of their 20,000 ton quota thus far this year. Expanding that to 80,000 tons will not matter. And even if they filled that, it only equates to 0.6% of U.S. beef production. Note that beef imports will top over 2 MILLION tons this year. Those small quota adjustments are irrelevant.

Demand remains the best ever seen. It could fade were the U.S. to shift into recession. But keep in mind that every recession in the past 40 years has seen retail beef prices rise through the recession. And most economists suggesting an impending recession are in the “soft landing” camp. Current employment and other economic data do not suggest a recession any time soon.

That leaves the other half of the equation: Supplies. We have a beef cow herd 10% smaller over the past 5 years. Liquidation through droughts actually increases production as a herd is culled. But we are now at the point where droughts have subsided and a smaller herd is making a smaller calf crop. Note the big drops in cattle on feed placements. Since April, U.S. beef production has averaged -6% lower; it was down -8% in August and September. I expect that when we get October data, that trend will continue. Those are big declines. And will lead to tightened supplies and higher prices.

Cull cow slaughter is now forecast to decline into 2026 as the “run ‘er one more year” cry is heard around squeeze chutes this fall. And beef imports are set to decline as Australia and Brazil appear headed for herd rebuilding in 2026 as well.

Bottom line: I may be the lone voice in the market today saying this, but the bull market is NOT yet over. Cash cutout prices moved higher last week. Futures will only move higher stubbornly behind cash but expect higher cash cattle prices in 2026 due to tightening supplies and solid demand.

Brett Stuart