US cattle markets head into the last quarter of 2026 facing drought-driven feed costs, changes in beef processing capacity and rising imports, according to Terrain Ag analyst Dave Weaber, Northern Ag Network reported. After record highs earlier in the summer, cattle prices have lost ground and the outlook is uncertain.
By the end of summer more than 80% of the nation's cattle inventory was in areas with abnormally dry or worse drought conditions. Hay prices across the Central and Northern Plains rose by an estimated $150-$200 a ton in about 60 days, adding to cow-calf costs and making herd expansion harder.
Packing capacity has partly recovered. Tyson Foods closed its Joslin, Illinois, plant in August, restored a second shift at Amarillo, Texas, and plans to sell its Pasco, Washington, plant; Cargill restarted its Fort Morgan, Colorado, plant in September after a labour agreement. Net fed-cattle slaughter capacity is up about 4,000 head a day from its summer low but still about 7,800 head a day below a year ago. Feeder cattle imports from Mexico are resuming after New World screwworm restrictions: Douglas, Arizona, has reopened to cattle from Sonora at an expected 4,000 head a week, and Santa Teresa, New Mexico, which has handled about 43% of annual Mexican imports, reopened on 24 September at about 3,750 head a week, with room to rise to 7,500-8,000.
Trade policy adds pressure. An August executive order suspended for 90 days the extra 26.4% duty on certain beef imports above quota, allowing up to 300,000 metric tons of trimmings, mainly from Brazil. Weaber expects only about 150,000 tons to arrive, 100,000 of it already bound for the US, lifting ground beef supply by 2-3%. He projects boxed beef cutout values $15-$20 per hundredweight lower and fed-cattle prices $9-$12 lower in the third and fourth quarters than a year earlier.
Weaber now sees five-area fed steers averaging $230-$235 per hundredweight in the third quarter, about $30 below his previous forecast, and near that range in the fourth, which could mean unhedged losses of $200-$250 a head for cattle sold in the third quarter. He expects feeder cattle at $340-$350 in the third quarter and $350-$370 in the fourth, and 450-pound steer calves averaging $465-$480 across the two quarters. Choice boxed beef appears to have found support at $375-$380 per hundredweight.
Photo: Billy Hathorn / Wikimedia Commons (CC BY-SA 3.0)
Source: Northern Ag Network
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