Fed Cattle News

Beef Industry Chaos: Tight Supplies, Strong Consumer Demand and Political Interference

Thu, 13 Nov 2025 19:42:19 GMT

The current state of the cattle market and beef industry has been described as chaotic. “There’s chaos in cattle,” as Chip Flory, AgriTalk host, put it.

The industry turmoil follows recent statements made by President Donald Trump regarding the need to lower beef prices as well as his request for the Department of Justice to immediately begin an investigation into meatpackers for driving up the price of beef.

Derrell Peel, Extension livestock marketing specialist from Oklahoma State University, affirms these are unique times, emphasizing while political factors have always indirectly influenced agriculture, it’s unprecedented for the cattle and beef markets to be at the center of direct political debate.

On a recent AgriTalk segment, Peel points out the inherent biological and production constraints of the cattle industry — particularly the fixed timeline to raise cattle — make quick fixes impossible. Both Flory and Peel stress that no political policy can shorten the cattle production process; any effective supply response requires patience and long-term adjustment.

Packers Under Fire

The concept of industry consolidation and foreign packer ownership has long drawn scrutiny with frequent government investigations. Peel says highly concentrated industries such as beef packing have been targets for skepticism and regulatory attention for over a century, to the point suspicion of packers is almost “a cultural thing” within segments of the industry.

He characterizes the latest call as another attempt to target convenient scapegoats rather than addressing deeper systemic realities of supply and demand.

“The reason we have the industry structure we do is because the economies of size and cost efficiencies are such a powerful economic force,” Peels explains.

He confirms researchers have long studied market power, and while concentration does have a small negative price impact for producers, the efficiency and cost-savings from large-scale firms more than compensate. These benefits, he says, keep cattle prices higher for producers and beef prices lower for consumers than they would be with a less efficient structure.

Dissecting the economics of margin markets Peels explains why price changes in different parts of the beef supply chain — cow-calf, feeders, packers and retailers — don’t move in lockstep. He uses a “bungee cord” analogy to illustrate the complex, dynamic and time-lagged interactions linking cattle prices at the farm with retail beef prices.

“All cattle prices and beef prices are ultimately connected, but they’re not connected with a stick or a chain,” Peel summarizes.” They’re connected with a bungee cord. There’s just an enormous amount of dynamics in this thing.”

Regarding the foreign ownership debate, Peel says there is no evidence foreign ownership alters packer behavior within the U.S. marketplace. He emphasizes foreign firms have made large investments in U.S. facilities and continue to operate them by the same market logic that would govern domestic ownership.

He also points out it is unclear who else would be in a position to make such significant investments if these foreign companies were not involved. This pragmatic view suggests the ownership issue might be less important than is commonly believed, at least concerning everyday operations and market outcomes.

A Lot Hinges on Rebuilding the Cow Herd

In his latest article, “ All Bets are Off ,” Peel says: “The latest edition in the torrent of recent political attentions directed at the cattle and beef industry includes allegations of market manipulation against the beef packing industry. Beef packers are the one segment that has been most negatively impacted in the current market, incurring huge losses due to poor margins and limited cattle supplies.”

(Meat Institute)

Peel reports packers have been losing enormous amounts of money for about the past 18 to 24 months. According to the Meat Institute, packer margins slipped into the red in September 2024. Through the week ending Oct. 4, 2025, packer margins were a negative $126.50 per head, up slightly from a year earlier at a negative $125.65 per head, according to Sterling Profit Tracker. The outlook for the year is a negative $165.96 per head packer margin.

“There’s just simply not enough cattle for them to operate at cost efficient capacities,” Peel explains.

This negative trend was anticipated — the reduced supply of cattle has made it difficult for packing plants to function at cost-efficient capacities, leading to the accumulation of operating losses. Peel points out the combination of low unit margins and insufficient cattle supplies challenges the economic viability of packers, further illustrating the complexity of the current environment.

This decline in inventory is not the result of a single factor but is driven by several years of drought and other market pressures. It is clear high beef and cattle prices are a result of these tight supplies and, according to Peel, these high prices are likely to persist for several years. The industry simply cannot turn around production levels quickly, and it will take time — a matter of years, not months — for conditions to normalize.

“Using logic that only works in the office of a politician, packers are supposedly wielding unacceptable market power while paying record high cattle prices and artificially raising beef prices … but not enough to avoid losing a couple hundred dollars on every animal they process — certainly many millions of dollars,” Peel says. “If beef packers had any significant ability to exercise market power, I am certain that we would not have record high cattle prices and packers would not be losing money.”

Peel suggests the federal government attacks on beef packers are aided and supported by a vocal minority of the cattle industry and a few sympathetic politicians who view packers as a perennial villain and always worthy of attack anytime the opportunity is presented.

“The timing of such attacks this time is particularly puzzling as dismantling the packing industry would certainly jeopardize current record high cattle prices and the best economic returns most producers have ever enjoyed,” Peels says. “I guess some cowboys just can’t stand prosperity.”

R-CALF CEO Bill Bullard says the cattle market is fundamentally broken citing years of an inverse relationship between falling cattle prices and increasing retail beef prices when the only ingredient in beef is cattle. Read more about his perspective.

Patience not Politics

Beef and cattle prices, Peel notes, are historically high, a result of industry-wide low cattle inventory. Rebuilding the nation’s cow herd will be a long, slow process, keeping prices elevated for an extended period. And Peel says there is no definitive evidence producers are saving heifers to start the rebuilding process.

“2025 may prove to be technically the cyclical low, but 2026 is going to be barely bigger, if it is, and no growth in 2026 and probably none in 2027 ... it’s 2028 into 2029 before that turns into increased beef production,” Peel predicts.

He summarizes neither regulatory nor political action will can speed up the rebuilding process. It will take years of concerted effort, market healing and stability before the industry can expect a meaningful rebound in herd numbers and production — a reality that requires patience across the industry.

“There is absolutely nothing anybody can do to make beef prices go down, or cattle prices, other than maybe tear up the industry completely,” Peels says. “And if we tear up the industry, it’ll make cattle prices go down, but it won’t make beef prices go down. It’ll make beef prices go even higher for consumers and the only way to fix this is to give the industry time to rebuild, and that’s going to take two to four years if we ever get started.”

He says a majority of cattle producers understand the beef industry is extremely complex and all segments are critical and essential.

“Though the outcome of current political actions is uncertain, the potential for long-term harm to the industry is substantial,” Peel says. “Anytime politics trumps economics, the strong supply and demand fundamentals that have determined the outlook for the industry to this point become irrelevant. Expectations for prices and production going forward are now completely clouded…therefore… all bets are off.”

Your Next Read: You Be The Judge: The Big Bad Beef Packers Are On Trial

Are We Seeing Signs of Herd Rebuilding?

Mon, 15 Sep 2025 13:46:26 GMT

The U.S. beef cow inventory has reached its lowest point since 1962, marking what appears to be the bottom of the current cattle cycle. Tight supply is driving the strong pricing environment beef producers are enjoying today.

“For cow-calf producers right now, things are as good as they’ve probably ever been,” says Troy Rowan, University of Tennessee assistant professor. “Even though things are really good, producers are conscientious and vigilant about potential challenges,” Rowan summarizes.

Agreeing with Rowan, South Dakota cattleman Ken Odde adds while profits are currently strong, inflation quickly erodes economic gains. He stresses the importance of risk management and diversification.

Early Signs of Herd Rebuilding?

This is the million-dollar question: Are there encouraging signs of expansion?

“The beef industry is not currently in herd expansion mode, with producers hesitant to retain heifers due to high costs and economic uncertainties,” says Dave Weaber, Terrain senior animal protein analyst.

In Drovers State of Industry Report to be released the week of Sept. 15, we breakdown the July USDA cattle inventory and cattle on feed reports. While the USDA reports showed the smallest U.S. herd in history and continuing tightening numbers on feed, analysts predict producers have not experienced the highest cattle prices, yet.

“Our national herd size has the industry at an interesting point,” Rowan says. “Prices are at all-time highs, inputs are reasonable and more cow-calf enterprises are profitable than ever. When the industrywide rebuild will happen remains up in the air, but producers are keeping in mind that the high-flying industry right now is not going to stick around forever. They’re starting to adopt new technologies, leveling up their crossbreeding programs and expand opportunities for non-cattle related income on their ranches.”

Weaber adds producers need to be intentional about herd expansion, understanding the financial implications of adding new cattle.

Beef-on-Dairy Fills the Beef Supply Gap

“The current dynamics of supply is going to be a challenge,” says Jarrod Gillig, Cargill senior vice president, managing director for beef.

Gillig summarizes the cattle industry is experiencing a critical period of transition. He doesn’t expect the cow herd to return to previous peak levels of 32 million head. Instead, he predicts the gap in supply will be filled by beef-on-dairy calves.

Nick Hardcastle, Cargill senior director of meat grading and technical specialist, explains how the beef-on-dairy calves are an upgrade to the traditional Holstein steer and the positive impact they are making on beef supply.

“Beef-on-dairy is more desirable because it helped overcome several Holstein difficulties,” he says. “Improvements include red meat yield — more meat to a consumer — as well as improved acceptance in branded programs.”

Hardcastle says the beef-on-dairy cattle are filling the supply gap by filling pens in the Plains states where feeders are needed, and they are widely accepted by feeders and packers.

Defining Future Beef Producer Success

Odde says the beef industry is not just surviving but positioning itself for significant transformation.

“Producers who remain flexible, technologically savvy and strategic in their approach will be best positioned to thrive in this changing environment,” he says.

Weaber agrees saying successful producers will be those who can adapt, manage costs effectively and align themselves with evolving market trends.

“Don’t let cost get away from you,” Weaber warns, emphasizing that “being a low-cost, high-productivity producer means you get to make money seven, eight or nine years of the cycle.”

He stresses the importance of understanding financial implications, particularly during market transitions.

“If we’re not working on the business, we can’t work in the business,” Weaber adds, summarizing his philosophy regarding producers’ need to adopt more strategic, data-driven approaches.

The State of the Beef Industry Report includes input from nearly 500 beef producers. The annual report provides information to help producers when making decisions. Click here to download the full report.

Your Next Read: 47% of Beef Producers Plan to Increase Herd Numbers

Did the U.S. Cattle Inventory Shrink Even More in a Year? 60% of Ag Economists Think So

Fri, 31 Jan 2025 19:49:00 GMT

Last year’s USDA Cattle Inventory Report showed the smallest cattle herd in 73 years . And with no strong signs of rebuilding underway, along with strong prices providing no incentive to retain heifers, agricultural economists think the U.S. cattle inventory has shrunk even more since last year.

Last year, USDA’s Cattle Inventory report showed as of Jan. 1, 2024, the All Cattle and Calves inventory was 87.15 million head, a 2% reduction in just a year. Ahead of the 2025 report, the January Ag Economists’ Monthly Monitor asked economists to project inventory as of Jan. 1, 2025.

50% said they expect inventory to fall to 86 to 86.9 million head.
20 percent expect inventory to remain similar to levels last year
An additional 20% think inventory will rise to 88 to 88.9 million head.
And 10% think cattle numbers could to 85 to 85.9 million head.

What would change a producer’s minds and give them confidence to grow their herds again? That’s exactly what we asked in the latest Ag Economists’ Monthly Monitor, which is an anonymous survey of nearly 70 ag economists from across the country. While some said it will just take time, others pointed to the economics of strong cow-calf returns, weaker fed cattle prices and lower prices at the sale barn.

Other economists said:

“Today’s high prices are certainly incentive, along with the expectation of moderate feed costs.”
“Government policies, global demand, price cycle”
“Better spring forage supplies could be the most important factor in growth. More quality labor could be critical, too.”
“Confidence that the general economy outlook is positive and that there are unlikely to be negative policy shocks. And, of course, there has to be adequate forage.”
“Improved weather pattern in the West, along with profitable margins.”

Record-High Prices

January Ag Economists’ Monthly Monitor

(Lindsey Pound )

Cattle prices continued to hit records this week. And with no signs of those record prices slowing down, it’s a question of how high these prices will actually go.

Is it the supply side or the demand side driving prices? According to economists in the survey, it’s both. And that’s why out of the 10 major commodities, economists are most bullish on cattle in 2025.

January Monthly Monitor

(Lindsey Pound )

Advice to Manage Risk
Even with no end in sight, the Ag Economists’ Monthly Monitor asked economists, “What advice you would offer beef producers to consider to make sure they are in the right position to take advantage of high prices now and to be prepared for when the market changes?” Here’s what they had to say:

“Stay sold forward, and avoid over-leveraging.”
“To just keeping looking at their genetics, retaining those with the best traits to continually improve herd quality and meat marketability.”
“For those with adequate forage availability, the near-term outlook for cattle profitability is very positive. Remember, though, that all good things come to an end—those who wait too long may only have more animals to market when prices turn back down again.”
“Consider all options for their risk management strategy, including both insurance products, futures, options, or other strategies.”
“You must have something to sell.”
“Today, there is more downside price risk for cattle prices. Risk management against a significant decline in future cattle prices should be considered today.”
“Hedge sales and inputs both. Hedge the crush!”

Six Questions One Industry Veterinarian Says She Is Asked Most Often About HPAI

Thu, 26 Sep 2024 19:00:28 GMT

The emerging issue of Highly Pathogenic H5N1 Avian Influenza (HPAI) in the U.S. dairy industry changes on nearly a daily basis.

Novonesis (a merger of Chr. Hansen and Novozymes) hosted a webinar on the issue on Friday to update producers, veterinarians and other members of the agricultural community.

“It’s a rapidly evolving situation,” lead presenter, Kay Russo, DVM, Novonesis technical services manager for dairy and poultry, North America, stressed at the beginning of the program.

“I’m getting a lot of questions, and I’m sure everybody on this call has questions. Or if you’re a veterinarian, you’re receiving them,” she said. “Again, this is a rapidly evolving situation, and what may seem correct today may be different tomorrow.”

Here are the six questions Russo said she is most frequently asked, and what her answers to them are – for now. Russo’s answers have been lightly edited for clarity.

Question #1: Is HNAI spreading from cow to cow?

Answer: Initially the thought was that every one of these animals was exposed to the disease from a bird. But at this point, there is some consideration for the fact that this may be spreading laterally. How it’s spreading is still unclear. There is some postulation that the virus is being spread in the milking parlor. Could it potentially be a mechanical spread from cow to cow on the milkers’ hands, or perhaps (on) the milking machines? Is it possible in these parlors where the humidity is high, it’s a warm environment that we’re seeing some aerosolization of the virus, so I would say that’s possible too. But there’s more work that needs to be done. But for all intents and purposes at this time, I would suspect there is some lateral transmission.

Question #2: Why are calves, younger lactation cows and the feedlot cattle not getting sick?

Answer: Ultimately, I don’t know the answer to this. More work needs to be done. The question needs to be answered. Are they truly not getting infected with a virus? Are they resistant to it, perhaps? Or is it that they are getting infected and just not demonstrating the clinical signs? We milk a lot of these dairy cows three times a day, so there’s a lot of eyes on them. In some of these instances, with the calves or in the feedlot cattle, you’re not handling them as often. We need to rely on the science to answer these questions in order to provide guidelines. I keep saying this, and I will continue to say it, we do not know what we do not measure. And we cannot provide guidelines around what we do not know.

Question #3: Is this a risk to humans?

Answer: The short answer is that it can infect humans. I know that in New Mexico, they are offering free testing to individuals that are working regularly with these infected herds. And if they are symptomatic – we’re seeing conjunctivitis and high fevers in some of them –they are being distributed Tamiflu for their use and for their families. This is a rapidly evolving situation, and the people that are working on it are doing everything they can to ensure the safety of those individuals that are most at risk.

Question #4: Is milk safe?

Answer: The FDA has stated the pasteurization process should kill the virus, and we should not see it in any saleable milk.

Question #5: Will this be a market limiting disease outbreak?

Answer: This is the major concern here, folks. These are important markets for us in this country. At this point, this is something that is absolutely a consideration. The goal here is to keep the farms in business.

Question #6: Are dairy farms a risk to poultry operations?

Answer: We’ve seen two commercial layer operations, one in West Texas and one in Michigan, be positive for highly pathogenic avian influenza this week. I know that there’s considerable amounts of work behind the scenes to determine the origin of the virus that caused the outbreak in those situations. Ultimately, in this circumstance, it’s going to be important that the cattle folks and the poultry folks come to the same table and talk and manage through this. We want to be good neighbors. These are two major industries in our country, so it’s important that the dialogue is there and continues so that we can keep (everyone) safe.

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New Price-fixing Suit Aimed at Big 4 Beef Packers

Tue, 17 Oct 2023 21:53:32 GMT

America’s Big 4 packing companies are the target of new price-fixing allegations from a group of small food distributors. Those distributors filed suit Oct. 9 in the U.S. District Court for the Northern District of Illinois, accusing the packers fixed prices for years.

The plaintiffs allege that beginning at least by January 1, 2015, Cargill, JBS USA, Tyson Foods, and National Beef Packing Co., “exploited their market power in this highly concentrated market by conspiring to limit the supply of beef sold to purchasers in the U.S. wholesale market, including Plaintiffs, which resulted in higher prices paid by Plaintiffs.”

The distributors said the alleged scheme caused financial harm at least through the end of 2021.

“As a result, Plaintiffs paid higher prices for beef than they otherwise would have paid in a competitive market,” states the lawsuit, seeking relief under the Sherman Antitrust Act.

Allegations by the four small distributors are similar to other suits filed against the Big 4 that have led to settlements in the tens of millions of dollars and led to scrutiny by the Department of Justice and Congress.

The lawsuit cites beef plant production data and price fluctuations, as well as testimony from two inside witnesses with knowledge of company agreements to help each other manage output.

The distributors are seeking a jury trial for unspecified damages and a permanent injunction.

In August, antitrust claims against the Big 4 by a group of ranchers was dismissed. A federal judge in Minnesota dismissed the claims filed by a putative class of cattle ranchers in a long-running case that alleged an industry-wide scheme to fix prices.

Walmart Beef Plant Tied to Investment in Sustainable Beef LLC

Tue, 13 Jun 2023 20:20:28 GMT

Walmart revealed Tuesday it plans to open a $257 million beef processing and packaging facility in Olathe, Kan. The plant is designed to package and distribute products from the new Sustainable Beef LLC plant that is under construction in North Platte, Neb.

Walmart announced in August of last year that it would take a minority stake in Sustainable Beef, a rancher-owned startup expected to be operational late next year. Sustainable Beef expects to process 1,500 head per day and up to 100,000 per year when fully operational.