USDA's June report noted a 1.2% drop in cattle on feed from the previous year, highlighting bullish industry trends. This decline stems from the continued tight supply of feeder cattle. As a result, fed cattle marketings also dropped 10.1%. Despite the U.S. cattle herd reaching historic lows, cash cattle prices experienced slight declines. Northern dressed cattle prices fell by $10 during the final week of June. This is most likely due to temporary softening in demand attributed to packers having adequate supplies on hand and reduced processing schedules due to the July 4th holiday. Even with these temporary declines, cattle prices remain close to record highs.
Consumers remain resilient and meat demand has remained strong despite record-high retail prices. The all-fresh retail beef price reached a peak of $8.50 per pound in the spring. Meanwhile, U.S. beef exports faced challenges. Export volumes were down 11% year over year in May. Exports to China were particularly impacted, dropping 90% compared to the previous year. Many U.S. beef processors remain ineligible to export to China due to expired registrations with the General Administration of Customs of China, a barrier that continues to severely limit export opportunities regardless of tariffs.
Profitability
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.
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