Steers stay the course

The latest cattle on feed report shows cattle are remaining on feed for longer periods. The cost of gain is currently more economical than the alternative of selling lighter cattle. On May 1, the total number of cattle on feed decreased to 11.4 million head, down 1.5% from the previous year. Cattle on feed for more than 150 days increased by 3.5% compared to the same period in 2024. Average steer dressed weights rose by 25 pounds, reaching levels significantly higher than a year ago and up more than 54 pounds from the five-year average. Both cattle marketings and placements also showed declines.

For now, cattle feeders are managing to partially offset tighter cattle supplies through elevated dressed weights, keeping beef production declines modest at just 0.8% year-to-date. However, looking ahead, industry-wide adjustments may be necessary to rebalance the supply chain and address the long-term implications of a contracting cattle inventory.

Tight supplies have driven price rallies and higher boxed beef prices, with livestock markets across the West reporting record highs nearly every week. While cattle futures have shown some fluctuation, the fed cash market has remained on an upward trajectory. Many analysts anticipate that 2026 or 2027 will bring cyclical highs in cattle prices.  

While ongoing tariff discussions have introduced uncertainty across the sector, they are not the only obstacles cattle producers currently face. For the second time in 2025, the exchange of live cattle at the Mexico border has been temporarily suspended due to the increasing risk of New World screwworm, which has now been detected as close as 700 miles from the U.S. border. As of April, year-to-date live cattle imports from Mexico fell by 60% compared to the previous year. This suspension will likely impact southern processors, who will need to secure more cattle amidst an already tight supply. Another trade concern has surfaced as China allowed the registration of 84 U.S. meat exporters to lapse at the start of the year. While only four of those exporters were in the beef sector, this situation warrants monitoring for potential long-term implications. U.S. beef exports dropped 9% in April 2025, with China cutting imports to one-third of the previous year’s levels.

Profitability

June 18, 2025

Cattle feeders: Profitable - Bearish 12-month outlook
Cow-calf producers Profitable - Bullish 12-month outlook

Although fed cattle prices remain strong and feed costs are expected to remain affordable in the near term, returns are anticipated to tighten in the fall of 2025 as feeder cattle prices continue to climb due to limited available supplies.

Record cattle prices, driven by a shrinking herd, are fueling strong profits in 2025, while lower feed costs are expected to persist in the near term.