Cattle producers all around the world face constant concerns about how beef is selling and whether they will have enough feed and water to maintain or grow their beef herds. They also face concerns about animal diseases that could impact cattle health, roil markets and cause beef demand to decline.
U.S producers currently face concerns that the red-hot beef market might cool off because retail beef prices soared in July to new record highs. USDA’s Choice beef averaged $9.69/pound, up $0.42/pound from the prior month and up $1.26/lb. or up 15% from the prior year. The All Fresh Beef price averaged $8.90/lb., up $0.27/lb. from June and up $0.75/lb. or 9.2% from year-ago levels. In contrast, the retail pork price averaged $5.01/lb. in July, up 1.8% from June and last year. The retail chicken price averaged $2.08/cwt, down 0.5% from June but up 4.5 % from July last year.
Analysts for several months have been closely examining the prices’ impact on beef sales. Minor cracks in what has been the positive foundation of beef demand are beginning to show, said Andrew Gottschalk of HedgersEdge.com in mid-August. Late buying to cover Labor Day holiday needs caused daily and weekly beef cutout values to soar. But post-Labor Day retail sales will likely provide a glimpse into what will be seen as real demand. Unlike cattle inventories, which are visible, beef demand can erode slowly and is often difficult to initially recognize, he said. However, Gottschalk said demand was “stellar” so far this year.
New research from CoBank’s Knowledge Exchange highlighted that the demand for beef products continues to hold and even grow as grocery prices are moving upward throughout 2025. Recent USDA data showed that its All Fresh retail beef demand index for the second quarter was the highest level in at least 25 years. Some of the factors shaping consumer buying behaviors, according to CoBank, are the heightened interest in dietary protein, changing health perceptions surrounding beef and the availability of restaurant-quality beef at retail stores.
Twelve months ago, the question was whether beef demand would hold up at higher prices, but today most analysts are fairly certain that beef value risk is to the upside, said Brian Earnest, lead animal protein economist with CoBank. Retail per capita beef consumption is headed for 60 pounds this year. U.S. consumers can’t seem to get enough protein these days, and, among animal proteins, beef remains king, he said
Meanwhile, U.S. cattle producers since late last year have faced the threat of New World screwworm (NWS) entering the U.S. from Mexico. NWS is a devastating pest, says USDA. When NWS fly larvae burrow into the flesh of a living animal, they cause serious and often deadly damage to the animal. NWS can infest livestock, pets, wildlife, occasionally birds, and in rare cases, people.
This is why USDA is investing up to $750 million to build the U.S.’s first domestic sterile NWS fly production facility. Agriculture Secretary Brooke Rollins on Aug. 15 detailed the agency’s latest efforts to combat NWS, that has yet to reemerge in the U.S. but is nearing the border with appearances in Central and South America as well as Mexico, with cases detected within 370 miles of the U.S. border. USDA has assessed the information on the ground in Mexico and have determined it must construct an additional sterile fly production facility in the U.S. to stop the northward advancement of this terrible pest that is threatening American cattle production, she said.
The new production facility will be based at Moore Airfield Base in Edinburg, TX, where USDA previously announced it was investing $8.5 million to create a dispersal facility for sterile flies, set to be completed by the end of the year. Once the newly announced production plant is finished, it will have the capacity to produce 300 million flies per week. The only current operating sterile NWS fly facility is in Pacora, Panama, where approximately 11 million flies are produced per week. That facility runs at full capacity. Several of the most prominent trade groups that represent U.S. cattle producers praised USDA’s investment but urged USDA to act as soon as possible to provide sterile flies.
It is no surprise then that imports of Mexican feeder cattle so far this year are running at 25% of the year earlier period (230,638 head versus 906,481 head). This dramatic shortfall has most impacted cattle on feed numbers in Texas. Its total on Aug. 1 was down 250,000 head from Aug. 1 last year. Southern Plains cattle feeders would like imports to resume but not at the expense of endangering the U.S. beef herd. — 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.)
