Global AgriTrends

10.23.26

Cattle and Beef Markets Shake Off the Import Scare

Cattle market fundamentals are reasserting themselves. Feeder cattle futures are up $42/cwt from their August lows, and fed cattle just ticked up to $226. The Trump-driven import sell-off is fading as we said it would. Export bookings are running higher, the order book is the fullest since March, and ribeyes sit near record highs heading into the holidays. Packers are losing leverage fast, while feeders are still deep in the red. A third Mexican border port opens Monday, but the first screwworm case in U.S. wildlife was just confirmed in Texas. Tomorrow’s Cattle on Feed report will again confirm smaller feeder cattle supplies with smaller placements.

Beef Market Indicators

• U.S. beef production is averaging -3.0% below a year ago the past 8 weeks.
• The choice cutout is trading at $372/cwt this week, the lower end of a tight range over the past 2 months. Ribeyes remain near record highs at $13.88/lb this week ahead of their rising seasonal demand into yearend. Chuck rolls remain high at $589/cwt. 90% trims continue lower at $384/cwt currently under the weight of heavy imported beef flows.
• Fed cattle prices saw a slight boost this week to $226/cwt with the possibility of higher prices into tomorrow.
• November feeder cattle futures have rallied $42/cwt off of their August lows, while December live cattle futures are up $19/cwt from those August lows. Recall the swift market reaction to Trump’s announcement of a 300,000 mt duty free import scheme for Brazil. We still expect less than half of that amount to arrive. But the damage was swift. Also recall our commentary that this market drop would be temporary and supply/demand fundamentals would move prices higher in the coming months. We continue to expect new price highs in cattle and beef into Q2 2027.
• USDA’s monthly Cattle on Feed report will be out tomorrow with expectations of on feed numbers steady with year ago, placements down -8%, and marketings down -3.5%. Feeder cattle supplies are tightening and carcass weight growth may be reaching an upper limit. That means the game of extending days on feed to keep yards full may be ending. Carcass weights were 983 pounds last week, up from 969 pounds a year ago, but that spread has narrowed in recent months.
• Beef imports are up 15% YTD. We forecast beef imports up 19% for the remainder of the year (Sep-Dec). But that flow is expected to tighten in 2027. Rain forecasts for Australia suggest an impending rebuild, and Brazil’s record high cattle prices and reduced production suggest their cycle has already begun to turn.
• Beef packer margins are dropping quickly (-$50/head in two weeks) due to declining cutout values and rising fed cattle prices. That leverage run may be short lived. The reality remains – tightening cattle supplies and strong demand lead to weak packer leverage for buying cattle. Packer margins were lifted only temporarily by the sentiment shock from the import announcement; we expect losses to return.
• Cattle feeders continue to see current closeouts deep in the red (but much better than two weeks ago). This week’s closeouts estimate is around -$200/head in the red (barring any risk management); two weeks ago that number was over $330/head. That puts breakevens around $235/cwt against this week’s $226/cwt fed price. Feeder cattle purchased this summer and fall remain well under water based on current live and feeder cattle futures. Estimated feedyard fed cattle price breakevens are around $235/cwt in December, $245 in February and above $250 in June, well above those futures contracts currently at $230, $232, and $234 (Dec, Feb, Apr).
• The Columbus, NM cattle import port is slated to open Monday (Oct 26). That will be the 3^rd port open (after Douglas, AZ and Santa Teresa, NM). Official import stats showed 33,321 head imported through October 9^th. The daily flow is estimated around 2,150 before the Columbus port opens next week. Cattle imports are flowing, but at rates WELL BELOW historical levels. Note that the first Screwworm case was found in wildlife this week; an elk in Pecos County, Texas. The Nogales, AZ port is scheduled to open November 30^th.
• The combined four Mexican cattle import ports have capacity for around 80% of historical cattle import flows. However, with reduced flows due to inspection and the potential for further Screwworm cases and disruption next summer, we expect 2027 cattle imports from Mexico to total around 675,000 head, around half of the historical flows.

Bottom Line

Beef production is running 3% below a year ago, carcass weights look close to topping out, and Cattle on Feed placements are expected 8% lower, so the industry is running out of ways to stretch tight cattle supplies. Demand remains strong. Ribeyes are near record highs, chuck rolls are firm, and export bookings are solid over the past four weeks. Only lean trimmings are struggling, weighed down by heavy imports. The market impact of the 300,000 mt duty-free import announcement is proving temporary: feeder futures have rallied $42/cwt and live cattle $19/cwt off their August lows. Packer margins have dropped about $50/head in two weeks, and their leverage run looks short-lived.

The outlook into 2027 points higher. Import flows should tighten as Australia moves toward rebuilding its herd and Brazil’s cycle turns. Mexican cattle will lift supplies slightly, with a third port opening Monday and a fourth slated for November 30. Even so, we expect only about 675,000 head in 2027, roughly half of historical flows, and the new screwworm find in Texas wildlife adds risk. Feeders still face tough math, with breakevens of $235–250 against futures of $230–234, and that should keep pressure on packers to bid up for cattle. We continue to expect new highs in cattle and beef prices into Q2 2027.

Brett Stuart