Cattle and beef prices began the new year with significant recovery from the late-2025 plunge, which was tied to a variety of factors including Tyson shuttering some of its packing capacity to on-again, off-again tariffs, rumors of the U.S. resuming feeder cattle imports from Mexico and all sorts of political rhetoric.

By the beginning of the year market focus had returned to unchanged supply and demand fundamentals, such as the continued decline in cattle numbers, excess beef packing capacity and stellar domestic consumer beef demand.

Economic Research Service (ERS) analysts explained that weekly prices for slaughter steers and feeder steers had recovered more than 60% of the decline from their respective highs last year to the lows that occurred in November. 

More specifically, ERS analysts note in the January Livestock, Dairy and Poultry Outlook (LDPO) that feeder steer prices last year peaked at $383.48/cwt. in Oklahoma City the middle of October. Prices then declined $66 over the course of six weeks to $317.71. By Jan. 5, prices were $362.34, which was $93 more year over year, representing a 68% recovery from the late-2025 price decline.

Similar to the feeder steer price trajectory, five-area direct weighted average FOB live fed steer prices peaked last year at $244.25/cwt. the week ending Aug. 24, 2025, according to the ERS. Prices declined nearly $33 to $211.53/cwt. the week ending November 30, 2025. Prices had recovered 62% by the middle of this month.

Prices ahead

USDA increased projected feeder steer prices (750-800 lbs., Oklahoma City) for 2026 in the January Livestock, Dairy and Poultry Outlook. Compared to the previous month, forecast prices increased by $12 to $352/cwt. in the first quarter, $355 in the second quarter and $359 in the third quarter for an annual average price of $357.

Likewise, USDA increased the projected five-area direct weighted average fed steer price, albeit slightly, in the January World Agricultural Supply and Demand Estimates (WASDE). Compared to the previous month, expected prices were $232/cwt. in the first quarter, $234 in the second and $237 in the third for an annual average of $236, which was $1 higher.

Estimated beef production for this year of 25.74 billion pounds was projected slightly higher than the previous month and would be 265 million pounds less (-1%) than the forecast total for 2025.

In the meantime, projected cattle feeding returns remain significantly positive through May of this year, based on the latest-available Historical and Projected Kansas Feedlot Net Returns. Keep in mind, these estimates are based on cash and assume no price risk management.

For instance, projected net returns for steers range from $463.31 per head in February to $221.79 in May, with a cost of feedlot gain increasing from $97.56 per cwt. in February to $102.21 in May. Then projected net returns turn negative, ranging from -$243.03 per head in June to -220.82 in August.

Primarily, returns decline as the price of purchased feeder cattle increases. Feeder prices range from $264.46 per cwt. in February to $286.69 in May before rocketing to $325.42 to $334.84 for June through August.

Peering further ahead, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University provided some of his expectations for 2026, in his late-December weekly market comments

Higher feeder and fed cattle prices — “Seven years of declining calf crops, culminating in the 2025 calf crop at the lowest level since 1941, and limited signs of heifer retention mean the feeder cattle supplies will be tighter going into 2026 and may tighten even more during the year if heifer retention picks up,” Peel says.

Prices advancing more slowly — “Feeder and fed cattle prices, though expected to increase, are likely to increase relatively less in 2026 compared to 2025,” Peel says. “In 2025, feeder cattle prices increased roughly 25-35%, while fed cattle prices increased 15-20%. Both feeder and fed prices are likely to see prices increase in the range of 5-15% in 2026.”

Continued volatility — “Unfortunately, volatility is likely to continue to be a risk for cattle producers,” Peel says. “The big fourth quarter 2025 correction should remove the tendency for a market or technical correction for quite some time, but external sources of uncertainty are likely to continue injecting volatility into cattle markets going forward. With cattle and beef markets continuing to be a focus of political scrutiny, markets are subject to additional political rhetoric and meddling.”

U.S. Beef Exports firming

Although continuing to be hamstrung by the lack us business with China, U.S. beef exports showed signs of strengthening, according to the latest data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Beef exports totaled 93,448 metric tons (mt) in October, down 11% year over year but the largest since June and 16% above the low volume posted in September. Export value was also the highest since June at $759.5 million, down 12% from a year ago but 15% above September.

“The latest export data confirm what I consistently hear from customers across the world and from our international staff – that global demand for U.S. red meat remains robust, despite tight supplies and formidable market access barriers,” says USMEF President and CEO Dan Halstrom. “Obviously, regaining access for U.S. beef in China is our most urgent priority, as industry losses from this lockout are enormous. But we are also hopeful that ongoing trade negotiations will remove barriers in other destinations where consumers have a growing appetite for high-quality red meat.”

January-October beef exports totaled 949,471 mt, down 11% from the 2024 pace, while value was down 10% to $7.79 billion. When excluding China from these results, exports were down 3% in volume and just 1% in value compared to the first 10 months of 2024.

October beef export value equated to $364.78 per head of fed slaughter, down 4% from a year ago. The January-October average was $390.28 per head, down 5% from the same period in 2024.

For broader context, pork exports totaled 264,657 mt in October, up 5% from a year ago. Value was 7% more at $762.1 million. Both volume and value were the largest since March.