Beef prices have become the federal poster child for high food prices and concerns about consumer affordability, said Derrell Peel, Oklahoma State University Extension livestock marketing specialist, in a letter called Cow-Calf Corner.
Much political attention resulted last year, focused on high beef prices as part of broader inflationary concerns among numerous food items – resulting from tariffs and other macroeconomic factors, Peel said. Ironically, high beef prices are only coincidentally contributing to inflation concerns in that beef prices are high because of internal beef market fundamentals rather than systemic inflation factors.
Strong beef supply and demand fundamentals mean that beef prices would be high even if there were no other inflation or macroeconomic concerns, he said.
PRODUCTION DOWN, PRICES UP
Beef production was down year over year in 2025 and expected to decrease further in the next two years, Peel said. Decreased beef production is the result of smaller US calf crops for seven straight years since 2018.
The feeder cattle supply continues to tighten as a result, leading to lower feedlot production, decreased cattle slaughter and lower beef production, he said. The beef cow herd may stabilize temporarily into 2026 as a result of decreased beef cow culling in the last three years.
However, there is no indication of significant heifer retention, and it will not be possible to hold the herd inventory stable and certainly not to rebuild inventories, without additional heifer retention, Peel said. Therefore, beef production was expected continue decreasing for the next couple years…likely leading to even higher beef prices.
POLITICIANS CAN’T HELP
No matter how much they would like to lower beef prices, there is essentially nothing politicians can do to change the beef market reality, Peel said.
The market already is responding to tight supply conditions with beef imports sharply higher last year, he said. Lower beef import tariffs in the latest version of spin-the-wheel trade policies will allow the market to function more effectively and may slightly moderate processing beef costs in the ground beef market.
However, imports are unlikely to have much additional noticeable effect going forward and certainly will not affect the majority of beef-cut prices at retail, Peel said. Likewise, any sort of cattle production incentives will not speed up the time it takes to breed, grow and finish cattle for beef production.
Revolving door packer investigations are unlikely to find anything different that multiple previous investigations and would not speed up beef production, he said.
Under the best of circumstances, it will take 2-4 years for enough herd rebuilding to increase domestic beef production significantly, Peel said. Cattle producers, already nervous and trying to deal with debilitating cattle market volatility and uncertainty, are spooked further every time politicians talk about imports, packer investigations or any other market meddling that comes to mind.
Such political talk delays producer plans and actions to respond to market signals and start the process of herd rebuilding, Peel said. Markets are remarkably efficient at fixing economic problems…when they are allowed to work.
There is no quick and easy way to lower beef prices, but political rhetoric makes the process even slower, he said. Frankly, the best thing politicians can do to help cattle and beef markets is to shut up and let the markets work.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $232.36 per cwt to $232.86, compared with last week’s range of $226.55 to $231.21 per cwt. FOB dressed steers and heifers went for $360.91 per cwt to $361.43, compared with $358.31 to $363.53.
The USDA choice cutout Monday was up $3.73 per cwt at $353.70 while select was up $4.58 at $351.50. The choice/select spread narrowed to $2.20 from $3.05 with 97 loads of fabricated product and 21 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef as $395.40 per cwt, and 50% beef was $144.58.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $0.90 to $1.10 a bushel over the Mar corn contract, which settled at $4.44 1/2, up $0.07.
The CME Feeder Cattle Index for the seven days ended Friday was $353.11 per cwt, up $2.89. This compares with Monday’s Jan contract settlement of $358.97, up $2.87.