The U.S. beef industry enters its two weakest demand months of the year. So, all eyes will be on how consumers respond to record-high prices in the retail meat case. The December retail All Fresh beef price averaged a record $9.55 per pound, up 15 cents from November’s $9.48/lb. and up 18.2% from December 2024. The December Choice beef price averaged $10.08/lb., the same as in November but up 20.3% from December 2024. One can’t help but feel that a lot of consumers in the next two months will find that most beef items are out of reach pricewise and will turn to much cheaper pork and poultry, which prices in December were lower than a year earlier.
Exacerbating the price impact is the fact that consumer confidence in the economy plummeted in January. The Conference Board’s Consumer Confidence Index fell by 9.7 points to 84.5 from an upwardly revised 94.2 in December. A 5.1-point upward revision to December’s reading resulted in a slight increase, reversing the initially reported decline. However, January’s preliminary results showed confidence resumed declining after a one-month uptick, the board said.
Confidence collapsed in January, as consumer concerns about both the present situation and expectations for the future deepened, said Dana Peterson, the board’s chief economist. All five components of the Index deteriorated, driving the overall Index to its lowest level since May 2014 (82.2), surpassing its COVID-19 pandemic depths, he said.
Yet consumer incomes will be key to maintaining or improving beef demand going forward, says Bob Wilson, HedgersEdge.com. The pace of inflation held steady in December from the previous month at an annual rate of 2.7%, well off the 2022 peak of over 9%. But on a line-item basis, groceries and meals away from home showed some of the largest increases during December as consumers embraced the holidays. Incomes also rely upon jobs. When tallying jobs for the year, 2025 had the lowest pace for average monthly job growth since 2003, excluding the two recessionary periods since the turn of the century, he said.
This split screen view will keep consumers edgy and cautious with their money, Wilson said. The upcoming payments for Christmas bills and the spike that is coming for heating bills following the most recent arctic storm will place further constraints on discretionary spending. February can be a quiet time at the retail beef counter, he said.
Fed cattle meanwhile started 2026 in record-breaking fashion. They set new all-time highs for quality grading and carcass weights. They graded 13.81% Prime and 73.40% Choice for a combined record of 87.21% the week that ended Jan. 3. They set another new grading record two weeks later. They graded 14.26% Prime and 73.04% Choice for a combined record of 87.30% the week that ended Jan. 17.
The Jan. 3 week also reported record high carcass weights. Overall weights averaged 905 lbs., breaking the previous record of 896 lbs. set the week that ended Nov. 22 last year. Steer weights averaged 989 lbs., breaking the previous record of 988 lbs. Heifer weights averaged 900 lbs., breaking the old record of 897 lbs. Both previous weights were also set in the week that ended Nov. 22.
Both sets of records are a function of cattle feeders holding on to cattle as long as possible and relatively mild weather in cattle feeding country (until recently). Cattle feeders still have a financial incentive to feed cattle to the heaviest possible weights, as packers are not discounting heavy cattle as in past years when there were ample supplies. In addition, market-ready supplies of cattle are increasing at the same time as harvest levels are declining.
Meanwhile, the Jan. 1 Cattle on Feed (COF) total was the lowest January total since 2017. But that did little to reduce the number of cattle on feed 150 days or more. The COF total of 11.450 million head was 96.8% of a year ago and exactly as forecast by analysts. Marketings in December totaled 1.773 million head, 101.8% of a year earlier. But December had one extra slaughter day than 2024, so the marketing percentage was 97.3% of a year earlier. December placements totaled 1.554 million head, 94.6% of a year earlier. This was the second lowest total for any month since the low mark was set as the COVID-19 pandemic commenced in the spring of 2020.
Cattle on feed 150 days or more on Feb. 1 will likely be up 19% year on year, Wilson said. These supplies may remain above the prior year levels through most of the first half of the year. Currently, the projection for April is that cattle on feed 150-plus days will be record-large for any month in any year, although accelerated marketings could still alter this level. The central question for feeder cattle and calf prices is whether the cyclical high has been achieved, Wilson said. — Steve Kay, WLJ columnist
(Steve Kay is editor/publisher of Cattle Buyers Weekly, an industry newsletter published at P.O. Box 2533, Petaluma, CA, 94953; 707-765-1725. Kay’s Korner appears exclusively in WLJ.)
