The US Department of Agriculture has lowered its expectations for American beef production in both 2026 and 2027, as historically weak cattle slaughter reflects a tight herd and reduced packing.

The department's Economic Research Service cut its 2026 forecast by 90 million pounds from August, to 24.877 billion pounds, and its 2027 forecast by 145 million pounds, to 24.835 billion pounds, citing slower-than-expected fed cattle and cow slaughter and changes in expected dressed weights.

The herd remains small. USDA's July inventory counted 94.2 million cattle and calves, including 28.5 million beef cows, down 1 per cent on a year earlier, and the 2026 calf crop was estimated at 32.5 million head, 2 per cent below 2025. Through August, federally inspected slaughter averaged about 8,000 fewer cattle per weekday than a year before, which USDA put down partly to the smaller herd and fewer feeder cattle imports from Mexico.

Feedlots with at least 1,000 head held 11.117 million cattle on 1 August, about 2 per cent more than a year earlier, but July placements fell 12 per cent to 1.367 million head and marketings dropped more than 7 per cent to 1.620 million. About 31 per cent of cattle on feed in August had been there more than 150 days, the second-highest share on record. Fewer placements are expected to mean fewer finished cattle in the second half of 2027, and higher feed prices are expected to reduce carcass weights.

Mexican feeder cattle offer limited relief. In the first week imports were allowed through Douglas, Arizona, 2,453 head crossed; only 104 came the next week because of a reported equipment problem. USDA plans to reopen the Santa Teresa, New Mexico, livestock port on 24 September as the second crossing under its phased plan.

Prices have nonetheless fallen from spring records. Five-area slaughter steers averaged $228.27 per hundredweight in August and $219.06 in the first week of September, about $44 below the mid-May high. USDA cut its third-quarter steer forecast by $12 to $230 and its fourth-quarter forecast by $20 to $225, and now sees a 2027 average of $237.50, $11.75 below its August projection.

Photo: Preston Keres, USDA / Wikimedia Commons (Public domain)

Source: AGDAILY