Global AgriTrends

11.26.25

Beef Market Update

The sharp drop in live cattle futures has not yet been matched by fed cattle prices. With live cattle futures down around 17%, fed cattle prices are only down about 8%. Feeder cattle features remained down around 19% while the feeder cattle index is only down around 9%. But future expectations have been lowered.

The November Cattle on Feed report showed Cattle on Feed inventory down -2% from a year ago with placements down -10%, and marketings down 8%. Heifers and heifer calves on feed totaled 4.355 million on October 1st down 5% from a year ago comprising 38.1% of the total. These were down 5% in the July Cattle on Feed report as well. Note that cattle on feed for more than 150 days were up 20% from a year ago and cattle on feed over 180 days were 1.26 million head, more than double the year ago levels. The market incentive to keep feeding cattle to larger weights remains solidly in place.

The largest declines of placements into feedyards were into Colorado at 64% of a year ago and Texas at 87% a year ago. The Texas inventory is now 91% of the year ago level while Colorado is at 87% of the year ago levels. The closure of the Mexico border has had a big impact on those placements. And the border closure remains in place for now. It's anyone's guess what the USDA will do regarding the Mexican border. But with continued Screwworm cases piling up in Mexico it is doubtful that USDA will reopen the border anytime soon. However, a presidential decree could change that.

The announcement by Tyson Foods to close their Lexington beef processing plant led to a limit-down day in cattle futures on Monday. Their announcement to shutter the Lexington plant with a daily capacity around 5,000 head and cut back their Amarillo plant to one shift per day. There has been some chatter that the Lexington plant was only running around 3,000 head per day. Note that new beef processing plants operating and set to be operational in 2026 will offset that capacity. Those new plants include the sustainable beef plant 60 miles West of Lexington that it's operational, killing 1,500 per day. Also, the America's Heartland plant (American Foods Group) in Missouri is designed to kill 2,400 head per day; it is now at 400 per day going to full capacity in 2026. Agribeef has added 500 head per day in a Jerome Idaho plant that is set to be operational next year. And greater Omaha has added 700 per day capacity over the past year.

Anytime a beef packing plant closes there is a shift in leverage and this one won't be felt regionally. Note that Nebraska cattle on feed inventories were 2% larger than a year ago. But as we move into 2026 with tighter cattle supplies and new increased packing capacity this lost capacity will be absorbed by new capacity and we expect that leverage will remain in favor of the cattle feeders due to tight supplies next year.

Beef exports continue falling with lower production. The August export data showed beef exports down -20% from a year ago, now down -10% YTD. That trend will continue as production tightens.