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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

Land O’Lakes, Inc. Champions Innovation in Agriculture with AgRogue Growth Partners

Fri, 05 Sep 2025 17:06:28 GMT

Land O’Lakes, Inc. recently unveiled its strategic launch of AgRogue Growth Partners, an ambitious initiative designed to harness the inherent strengths of the cooperative model. This project aims to fast-track the discovery, investment and adoption of breakthrough technologies to benefit farmers, their businesses and their communities.

“We are taking a very deliberate approach to the topic of venture capital,” says Jason Trusley, chief strategy officer at Land O’ Lakes. Trusley is leveraging his “outside in” strategy leaning on his experiences at Nike, Columbia and Nordstrom and now applying it to his work with the Land O’ Lakes team.

AgRogue includes an investment of up to $7 million in each of 10 to 15 companies focused on innovations in categories spanning:

crop inputs
ag data
supply chain processes
business models

The first participants should be selected by the end of October.

“Our market access through the 800+ retailer partners, and putting skin in the game to help scale these investments is quite different than what we’ve seen in growth equity. We want to invest at the point of inflection, and we believe our system can help find the momentum and then rapidly scale,” Trusley says.

Brett Bruggeman, chief operating officer and executive vice president of ag business at Land O’Lakes, highlights Ag Rogue Growth Parnters is “co-authored” with some of its retail partners.

“Our retail partners are half investors,” Bruggeman says. “The idea was sourced from our CEO council, the largest retailers in our system, two years ago. Right now, we have six retail partners engaged, but more can come on.”

Current retail partners in AgRogue include:

Alabama Farmers Cooperative (Alabama)
Central Valley Ag (Nebraska)
Farmers Cooperative – Dorchester (Nebraska)
Farmward Cooperative (Minnesota)
GreenPoint Ag (Alabama)
Keystone Cooperative (Indiana)

“AgRogue Growth Partners represents an exciting new chapter in agricultural innovation, driven by a commitment to farmer success. By uniting our strengths, we will focus on creating new opportunities for farmers to thrive, providing them with the new tools and resources they need to overcome industry challenges and grow a more reliable, abundant food supply,” Kevin Still, president and CEO of Keystone Cooperative, said in a company press release.

AgRogue Growth Partners will have another partner in Radicle Growth, who will manage the program and vet the startups.

Trusley says there are four themes AgRogue will address:

optimize farm income
improve grain quality/find premium markets
resiliency and soil health
help grow the retail business through systems, innovations and partnerships

“We are seeking pre-market innovation. And for example, Cooperative Ventures (CHS and Growmark’s initiative) could be potential partners as we transition closer to the growth curve,” Trusley says. “Cooperation is important to drive change in agriculture, and cooperation is especially complex with cooperatives. We are trying to create more diversification and greater scale to the funding to solve the broader set of issues for farmers.”

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Meet 87-Year-Old Joan Kerns, A True Trailblazer Who Helped Carve Out A Niche For Her Family Nearly 60 Years Ago

Mon, 26 Feb 2024 22:06:28 GMT

Cut by cut. Slice by slice. Every detail counts for Edgewood Locker , a northeast Iowa-based business that’s been spliced together for nearly 60 years in 1966.

With no master plan, it started when Tom, a farmer, and Joan, a nurse at the time, were forced to find a new place to live.

“We were on his dad’s farm for five years when his dad announced he was going to sell the farm. He wanted us to buy it, but we could not afford to buy a huge farm back then,” Joan explains.

So, they found a farm to rent three miles outside of Edgewood, until an accidental fire on that farm sparked another change.

“Talk about an act of fate. We knew the lady who owned that farm was going to make us move, because she believed those stories that we started the fire,” Joan remembers. “Tom came home one day and said, ‘The locker in town is for sale.’ So, we bought it.”

It was that decision that changed the course for the Kerns family. Neither Joan nor Tom knew anything about running a meat locker, but they had the tenacity to make it work.

“Tom wanted to do the actual meat cutting and that sort of thing, and I was going to do all the books and the book work,” says Joan.

The business started out with minimal equipment: only a saw and a grinder at the locker. That didn’t stop the Kerns from seeing phenomenal growth.

“And every year we were in business, we grew. Every year we got bigger. And so, finally, we outgrew our plant,” she says.

The growth wasn’t always easy, and it didn’t come without financial hardships. Joan says the couple borrowed money to expand and grow six different times.

“But I remember, maybe the second or third time Tom said, ‘I’m going to go up to the bank tomorrow and borrow some money for the next addition,’ and I went up to do our daily banking that day. And the girl said, ‘Oh, we can give you the money.’ So, I borrowed the money, got back home and I told him. I said, ‘Well, I got the money borrowed for our new addition.’ Tom said, ‘They let a woman do that?’ That’s the way it was back then,” says Joan.

A Force of Nature

Joan’s son Terry will be the first to tell you how much his mom was a driving force behind the scenes, if she didn’t always get the credit she deserved.

“She’s kind of a force of nature, there’s no doubt about it, and probably even more so than anybody realizes,” says Terry, who’s one of two second-generation owners of Edgewood Locker.

What makes Joan’s role so essential to their growth is the fact Joan’s husband, Tom, was dyslexic. So behind the scenes, Joan handled the paperwork and books, all while raising four kids at home.

Bringing in the Second Generation Straight Out of High School

Joan is still a true trailblazer today, as the Kerns’ unconventional ways and business decisions also helped fuel the family operation.

“The boys had come into the locker business as they graduated from high school, which really let us dream bigger,” says Joan.

That was in the early 1980s. Tom and Joan didn’t just see their sons Terry and Jim as employees, they allowed the boys to buy into the business fresh out of high school.

“It wasn’t popular with their peers that they allowed Jim and me to buy in at such a young age, you know. They gave us a huge opportunity,” remembers Terry.

“And I think that’s why we grew as we did, because they were partners. They were going to be in this, and it made a big difference,” Joan says.

The growth has been impressive over the past 60 years, including building a new facility in the late 1990s that has seen even more expansion since.

“We built this business because she paid attention to detail. And she wanted to make sure it was done right. She still keeps us on our toes,” says Terry.

At 87-years-old, Joan is sharp, and attention to detail may still be one of her greatest strengths.

“She is not afraid to tell us when she thinks we’ve done something wrong,” says Terry.

Bringing in the Third Generation

While Joan doesn’t overlook the small things, she’s also the first to celebrate how much the family business has grown. It now includes four grandkids who have become part-owners.

“Oh my gosh, I did not see that coming. And they each bring their own experience, knowledge, their forte to the business,” says Joan.

“All of us in the third generation, all I feel have a very unique skill set, which allows all of us to bring something different to the table,” says Baili Maurer, one of Joan’s grandchildren who bought in as a third-generation owner.

“None of us really overlap much. We all have our own thing that we do, and it just works,” adds Katie, who’s also one of four grandchildren who are partners.

Katie and Bailli, along with Luke Kerns and Payson Kerns, are the third-generation owners of Edgewood Locker.

“They’ve got experience, they’ve got education in meat science in business. So, as fun as it was to grow with Mom and Dad adding Jim and me, this next generation really has the potential to do amazing things,” says Terry.

Third-Generation Growth

“We’re just doing what we can to take the business to a new level,” says Baili.

“We really expanded into wholesale stores and retail stores carrying our products. And we just keep going with what the second generation and first generation have been doing, as well,” adds Katie.

The growth is evident everywhere you turn. Construction in their retail and lobby area is a clear sign of even more progress.

“We had a major expansion of 19,000-square-feet that we’ve been in now a little over a year and a half, and I think it’s running well,” says Terry. “We remodeled our old processing facility and updated that, and it looks like brand new.”

The decision to expand and remodel their retail and lobby area was propelled by the busiest season for Edgewood Locker: deer season.

“I think last year, we did 3,700 whole-carcass deer, and then over 3,500 batches of boned-out deer that came in, so well over 7,000 different batches to jerky,” Terry says.

With that type of volume, Edgewood Locker has also been able to invest in bigger and better equipment.

“I’d like to say we had this great master plan, but we never had a real plan to say, ‘Well, next year, we’re going to get into wholesaling, or next year, we’re going to do this.’ We just kind of took it as it came. Something presented itself, we ran with it, and ran hard with a lot of it,” says Terry.

A Legacy Worth Sharing

With 130 full-time, part-time and seasonal employees, Edgewood Locker also offers other custom processing, and has products for sale, in more than 100 retail stores across Iowa. And it’s that side of the business the third generation has already helped expand.

“I hope we can just continue the legacy,” says Baili.

“I’m hopeful that we can just keep doing like we’re doing, keep growing where we can and keep expanding things and have it all set up for the fourth generation if they would like to join in someday,” Katie says.

Walls of awards are a product of what Joan and Tom started in 1966, but that isn’t what Joan is most proud of today. The greatest gift just may be the fourth generation and the chance to carry on a business that started on hopes and dreams.

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.

Walmart Invests In Proposed Nebraska Packing Plant

From Seedstock to Meat Case, A Vision Becomes Reality for Nebraska Rancher

Vilsack Lists USDA's 4 Policy Objectives for 2023

Wed, 11 Jan 2023 14:16:20 GMT

USDA Secretary Tom Vilsack has a history of making key announcements during visits, and that was the case during his appearance at the American Farm Bureau Federation’s annual meeting in Puerto Rico.

Some of them include:

1. ERP Phase 2

Vilsack announced Phase 2 of the ERP, which will provide help to producers for production and quality losses of eligible crops, utilizing calculations of a producer’s decrease in gross revenue.

Those were about to be released months ago but were pulled back at the last minute due to lawmaker and farmer complaints. USDA eventually announced anyway.

USDA said in documentation on file at the Federal Register that using that approach will reflect the losses “without requiring the more extensive calculations and documentation required under previous programs” for disaster-related crop losses. USDA said this streamlines the aid to minimize the burden on producers and processing of applications by county FSA offices. Using that process also means it will address losses for a qualifying disaster event whether it happened before or after harvest.

ERP Phase 2 will be available for a decrease in gross revenue in 2020 or 2021, primarily to those with losses not covered by Federal Crop Insurance or the Noninsured Assistance Program (NAP).

The application period is Jan. 23-June 2. USDA has already paid out $7.31 billion under ERP Phase 1 as of Jan. 8, up from $7.28 billion the prior week, including $6.23 billion for non-specialty crops ($6.21 billion prior) and $1.09 billion for specialty crops ($1.08 billion prior). A total of $10 billion was earmarked for ERP.

USDA projects outlays for ERP Phase 2 payments will be $1.2 billion and will likely be pro-rated as USDA projects total gross outlays at $1.5 billion.

Phase 2 Reflection

Phase I was highly successful and it worked well. Phase 2 has tons of problems. Comparing schedule F in relevant years to past years doesn’t reflect losses. A farmer may have had to sell land or livestock when they didn’t want to. They may have sold a previous year’s crop in the year in question. These and other things skew the schedule F. There is also the issue of forcing farmers to share schedule F info with local FSA offices.

2. Pandemic Assistance Revenue Program (PARP)

Vilsack announced PARP payments for producers that suffered a 15% or greater decrease in allowable gross revenue for the 2020 calendar year compared with either 2018 or 2019. This effort, Vilsack said, aims to “fill in gaps” for losses covered by either Phase 1 or Phase 2 of ERP.

The payments will have a factor of 80% (90% for underserved farmers and ranchers) and will be reduced by 2020 ERP payments, and pandemic assistance under either the Coronavirus Food Assistance Program (CFAP) 1 or 2 and other pandemic aid.

Payments will be limited to $125,000 per person or entity and USDA may set a lower maximum payment amount per person if total payments exceed available funding and USDA expects that to be the case — PARP outlays are projected at $250 million with gross outlays pegged at $2.66 billion.

USDA also will expand payments under prior efforts such as CFAP 2 and others. The total payments USDA projects under the ERP Phase 2, PARP and expanded other programs is $1.82 billion with gross amounts at $4.54 billion.

3. U.S.-Made Fertilizer

USDA will seek public comment on 21 potentially viable projects totaling up to $88 million to boost U.S. fertilizer production via the first round of USDA’s Federal Production Expansion Program, a $500 million effort announced earlier this year.

The projects are in Alabama, Arizona, Colorado, Florida, Iowa, Louisiana, Massachusetts, Minnesota, Missouri, Montana, Ohio, Oregon, Texas, Washington, and Wisconsin. USDA is seeking comments through Feb. 8 on the environmental impacts of the projects.

4. Meat and Poultry Processing

Vilsack announced three projects in Ohio, Michigan and Minnesota which will expand independent meat and poultry processing capacity via the Meat and Poultry Processing Expansion Program.

The projects total $12 million and are in addition to other recently announced efforts in the sector.

More on policy:

We Have ERP Phase II
Policy and Payments: What Producers Can Expect in 2023