Several factors may explain why cattle markets have not reached new record highs recently. From January through August, beef imports increased by 20.87% (523.7 million pounds), with South American suppliers, particularly Brazil, finding it economically viable to pay U.S. tariffs rather than exporting to other markets. Import volumes are expected to remain high as companies stockpile for 2025, anticipating limited domestic slaughter due to herd rebuilding. Meanwhile, Australia, reaching its production peak, has abundant beef available for export due to favorable weather conditions supporting herd growth.
On the export side, U.S. beef exports have declined by 3.58% (74.6 million pounds) year-to-date, with reduced demand from China due to economic struggles and limited gains in exports to cost-conscious South Korea, which has seen only a modest 1.9% value increase year-to-date. The strong U.S. dollar has also pressured exports broadly.
Imports of feeder cattle rose by 21.72% (186,600 head), while cattle imports for immediate slaughter increased by 19.5% (64,190 head), driven by drought in Mexico and improved genetics in the Mexican beef herd, leading to higher cross-border imports to meet U.S. supply needs.
Cattle weights have increased compared to last year, with dressed steer and heifer weights up by 24 pounds and 20 pounds, respectively. This weight gain has balanced out reduced slaughter numbers, resulting in a 1.81% increase (296.8 million pounds) in fed production. Lower feed costs and a decrease in cattle supply incentivize longer feeding periods to sustain feedlot numbers.
Recently, live and feeder cattle futures experienced a sell-off after hitting resistance levels on the charts. Managed money has contributed to price movements, with substantial buying in both live and feeder cattle positions over recent weeks.
On the economic side, September’s Consumer Price Index (CPI) data showed modest inflation, with food prices away from home up 3.9% and grocery prices up 1.3%. This gap in food costs has driven consumers to prioritize at-home eating. The average retail price of beef rose to $8.21 per pound in September, 39 cents higher than the previous year. As grocery beef prices continue rising, it raises questions about potential consumer shifts toward less expensive proteins, given beef’s considerable role in household food budgets.
