The tariff war between the U.S. and China hangs over U.S. agriculture like a dark cloud. The U.S. red meat industry looks it’s like losing all Chinese business for some time. But you wouldn’t know it by looking at U.S. cattle prices. All classes of cattle are trading at record high or near record-high prices, because of the smallest national cattle herd in 74 years and because of strong domestic beef demand.
The year began promisingly because of those two factors. But no one envisioned that live cattle prices would stay above $200/cwt live price week after week, and set new records in some of the weeks. The latest record came the week before last when the five-area steer price averaged $216.32/cwt live, up $4.69/cwt on the prior week. The price amazingly was up 17.5% on the same week last year. There is every likelihood that the coming weeks will see more record high prices because the grilling season has begun and the Memorial Day holiday on May 26 represents the biggest holiday week and weekend for retail beef sales.
Some analysts however are raising caution flags. The likelihood of a tariff-induced recession is rising in the U.S. and worsening consumer sentiment jeopardizes what was expected to be a recovery year for foodservice and retail, said agribusiness lender Rabobank in its April Agribusiness Review. Trade disruption has begun to weigh on pork values, leaving producers cautious, while milk production returns to growth while tariff risks linger. But beef demand remains strong across North America, with U.S. retail beef prices reaching new highs. Trade wars, macroeconomic uncertainty and the prospect of a record 2025/26 crop make it hard for corn producers to capitalize on improved old-crop fundamentals, said Rabobank.
Stronger beef and cattle demand across North America provided the markets for both with some resiliency in early 2025, said Rabobank. But uncertainty persists as the global market adjusts to trade news. Trade negotiations between the U.S. and its global partners are evolving every day. Rabobank expects that to continue throughout much of 2025. Yet for U.S. beef markets, one constant remains. U.S. consumers largely consume domestically sourced beef. U.S. beef imports in 2024 were record large, surpassing 4.6 billion pounds. But that volume represented only 18% of U.S. beef consumption. U.S. steer and heifer slaughter is approximately 66% of domestic consumption, while another 16% is from U.S. cull cows and bulls, said Rabobank.
U.S. beef exports are also a relatively small volume, representing 11% of production in 2024, said Rabobank. Maintaining free-flowing cattle and beef trade with Canada and Mexico will remain important to U.S. capacity utilization as domestic cattle supplies decline. Collectively, the two countries represent 11% of U.S. beef consumption. Furthermore, Chinese tariff and non-tariff barriers complicate U.S. beef export market access going forward, while China has been a top three market for U.S. beef over the last three years, it says.
U.S. beef demand remained exceptional ahead of the spring demand period, said Rabobank. USDA’s All-Fresh Beef price posted a new all-time high in March of $8.42/lb. (the Choice price was also record high at $8.75/lb.) The two prices were up 6.7% and 7.8%, respectively, from March last year. Beef cutout prices were 9% higher over the same period. Per-capita beef supplies were estimated to be 2% stronger for the quarter, and retail and wholesale beef demand were up 6% and 9%, respectively, compared to 2024.
However, potential threats to beef demand exist, said Rabobank. Recession risk is elevated and increased market uncertainty is dragging down consumer confidence. The good news is that the labor markets remain relatively strong and energy prices are declining. Middle meats tend to support cutout values in April and May as buyers prepare for the grilling season. But consumer concerns could weaken the market for those higher-end cuts that have been more responsible for recent year-over-year gains in cutout values, it says.
Mexican feeder cattle and calf imports in February were allowed into the U.S. for the first time since New World screwworm larvae were detected in Mexican cattle last November. Rabobank estimates that 400,000 head of potential cattle imports remained in Mexico due to the temporary trade restriction. — 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.)
