Supply and demand fundamentals fueling the cattle market’s lengthy bull run remain largely unchanged, but prices took a decidedly negative turn heading into July. 

Wholesale beef values never sparked as much as seasonally expected with Choice the cutout price reaching a recent peak of $400.31/cwt. June 23 and then declining $33.50 by July 17. Regional negotiated cash fed cattle prices declined roughly $18-$20/cwt. during the same period as packers regained some leverage. On the other side of the gate, the CME Feeder Cattle Index was near $364 at either end of June 17 and July 17 but had risen as high as $381.86 June 24.

Along the way, financial funds holding dogeared long positions in the cattle futures market began to flee. From June 17 to July 17, spot Live Cattle futures sank $24.42 to $224.42; near Dec was down $19.98 at $220.52. Spot Feeder Cattle futures declined $21.47 to $345.95 with Sept down about $20 at $332.82.

Ciphering the reasons

Hog tying a ghost might be easier than pinpointing the specific reasons or combination of influences that pushed prices and market psychology lower. These are likely some of the suspects:

• Lingering uncertainty about New World screwworm, both the extent of it in the United States and when the U.S. border will finally reopen to Mexican feeder cattle imports.

• Continued uncertainty about the U.S.-Iran war and its impact on oil prices and other inflationary pressures facing consumers.

• Intervention by the federal government aimed at lower consumer beef prices, including lowering or removing tariffs on beef imports from some counties, as well as subsidizing smaller beef packing plants via the Strengthening Processing for U.S. Ranchers (SPUR) Program, which excludes the major beef packers responsible for harvesting the mass majority of the nation’s cattle.

• Expanding U.S. drought, altering the expansion plans of some and altering marketing patterns along the way.

Beef demand remains strong

Although there are signs of consumer price fatigue, retail prices suggest U.S. consumers remain willing buyers.

Choice retail beef prices were 10¢ higher month to month in June at $10.45 per pound, according to the latest USDA data. Year over year, the Choice retail beef price was $1.18 higher (12.7%). Likewise, the all-fresh retail beef price was 12¢ higher month to month and $1.01 higher year over year (11.7%) at $9.64 per pound. 

“June’s All-Fresh retail beef price was the third highest on record behind $10.00 per pound in April and $9.69 per pound in February of this year,” according to analysts with the Livestock Marketing Information Center (LMIC) in the July 17 Livestock Monitor. “USDA-ERS reported June’s retail beef steak price at $12.88 per pound, an increase of $1.39 per pound (+12%) from last year and the second highest price on record behind $13.02 per pound in April 2026. Roasts increased $1.23 per pound (+15%) to a record of $9.43 per pound in June, surpassing the prior record of $9.41 per pound in April 2026. For the last three months, retail ground beef prices exceeded the $7 per pound mark. June was a record at $7.14 per pound, up $0.80 per pound (+13%) from last year.”

Moreover, U.S. beef exports show signs of strengthening, based on data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

May beef exports totaled 91,925 metric tons (mt), down 5% from a year ago. However, value increased 2% to $818.1 million, bolstered by value increases in Taiwan, Japan, the ASEAN region, Central and South America and Egypt. 

Export value per head of fed slaughter soared to $468 in May, the highest in nearly four years. Despite China’s mid-May renewal of expired U.S. beef plant registrations, May exports to China remained minimal as technical obstacles are yet to be resolved.

For January through May, beef exports were 10% below last year’s pace at 457,063 mt, while value fell 5% to $3.95 billion. When excluding China from these results, January-May beef exports were down less than 1% in volume and were 6% higher in value.

“Despite significant headwinds, we are seeing some encouraging trends on the beef side,” says Dan Halstrom, USMEF president and CEO. “Many facilities remain suspended and unable to export to China, while exporters overall remain reluctant to ship until technical obstacles are resolved and China agrees to meet its Phase One Agreement commitments. But Taiwan has been a major bright spot this year, and while exports to South Korea have trended lower, we expect an uptick in Korea’s demand when a higher tariff rate on Australian beef is triggered later this month.”

Looking ahead

USDA’s Economic Research Service raised the forecast third quarter feeder steer price by $2, compared to the previous month to $380/cwt., in the July Livestock, Dairy and Poultry Outlook (LDPO). Prices were unchanged for the fourth quarter at $382, while the projected annual average price increased about $1 to $376.26. The price is a basis a Medium and large #1 steer weighing 750-800 lbs., selling at Oklahoma National Stockyards.

The ERS increased the third-quarter weighted average five-area direct fed steer by $3 to $255/cwt. in the July World Agricultural Supply and Demand Estimates (WASDE).  The projected fourth-quarter price was unchanged at $255, while the forecast annual average price was slightly higher at $251.10. 

That was with beef production this year estimated 150 million pounds lower (-0.6%) than the previous month at 25.3 billion pounds, which would be 715 million pounds less than last year (-2.7%).

As for potential herd expansion, as mentioned, drought continues to vex some. ERS analysts note pasture conditions are generally weaker than last year and are similar to levels seen during previous droughts that increased beef cow slaughter.

Based on data from the U.S. Drought Monitor on July 7, they explain approximately 46% of the cattle inventory was in an area experiencing at least moderate drought compared to just 16% percent last year. “Although extreme and exceptional levels of drought are not as widespread as in past years’ droughts, several large cattle producing regions are receiving the brunt of the drought,” they say in the recent LDPO.