US beef market faces ongoing supply scarcity amid slow herd rebuilding and trade shifts

USDA forecasts lower beef production through 2027, intensifying price pressures amid slow herd recovery and evolving international trade, impacting futures and cash markets.

US beef markets remain under pressure from chronically tight cattle supplies, with USDA now expecting production to stay below recent years through 2027. The department’s outlook points to 25.288 billion pounds of beef output in 2026 and 25.200 billion pounds in 2027, while forecasting a further rise in slaughter-steer prices as herd rebuilding remains slow and fed-cattle slaughter eases.

That scarcity has been feeding through to futures and the cash market. August live cattle and feeder cattle both fell sharply on technical selling this week, with traders also reacting to weaker boxed beef values and a steep drop in cash trade. USDA reported only light trading at $232 a hundredweight midweek, after last week’s average cash cattle price fell to $238.28 from $248.01 a week earlier.

The broader protein market is also being shaped by trade flows. Mexico has fully reopened its market to US pork offal, restoring an estimated $6 million to $7 million a week in business after pseudorabies-related restrictions. Industry groups say the move should help relieve inventory pressure and improve carcass values.

Meanwhile, a new 50% US tariff action on Canadian goods leaves live hogs untouched, sparing the cross-border weaner trade for now.

Friday’s USDA cattle and beef reports will be closely watched for signs that the historic sell-off has further to run.

Source: Noah Wire Services