Beef Market Update: Heavy cattle, tightening supply, and cautious optimism

"Packers continue to operate with reduced harvest levels and are facing negative margins, a situation made more difficult by steady wholesale beef values and a narrow choice-select spread. Fed cattle trade remains steady, with Alberta prices ticking slightly higher and Ontario holding firm at $5.30/cwt. While the first quarter often sees softer demand, retail prices are unlikely to fall significantly in the near term due to tight supply and a long lead time for herd expansion."

"The January 1 U.S. cattle-on-feed report showed a three per cent year-over-year decline, marking the smallest inventory for that date since 2017. Although the data suggests the cow herd decline has stopped, there's little evidence of meaningful growth, with only modest heifer retention expected. Demand, meanwhile, remained remarkably strong in 2025, setting the stage for discussions around trade policy and supply constraints as producers gather for next week's CattleCon in Nashville."

"Closer to home, Canadian export statistics show a rise in both fed and cow exports to the U.S., while feeder cattle exports remain low. Imports of feeder cattle from the U.S. are poised to set a new record, driven by both steady beef-on-dairy movement and larger fall runs of conventional calves. With volatility still a factor, Wasko encourages ranchers to consider livestock price insurance as calf price coverage becomes available starting February 3."

Packers operate with reduced harvest levels and face negative margins due to steady wholesale beef values and a narrow choice-select spread. Fed cattle trade remains steady with Alberta prices ticking slightly higher and Ontario holding firm at $5.30/cwt. First-quarter demand often softens, but retail prices are unlikely to fall significantly in the near term because of tight supply and a long lead time for herd expansion. The January 1 U.S. cattle-on-feed report showed a three per cent year-over-year decline, the smallest inventory for that date since 2017, and the cow herd decline appears to have stopped with only modest heifer retention expected. Demand remained remarkably strong in 2025, prompting trade policy and supply-constraint considerations as producers prepare to gather for CattleCon in Nashville. Canadian statistics show increased fed and cow exports to the U.S. while feeder exports stay low, and imports of U.S. feeder cattle are poised to set a new record driven by beef-on-dairy movement and larger fall runs of conventional calves. With ongoing volatility, ranchers are encouraged to consider livestock price insurance starting February 3 and to reevaluate AgriStability for managing risk and margin pressure.

Read at Realagriculture