Live cattle enters H2 2026 at approximately $185/cwt, up 8% year-over-year, as the US cow herd at 85 million head (down 2%) meets resilient beef demand. US beef production is forecast at 27 billion pounds, down 1% year-over-year.
Drought conditions in the Southern Plains have triggered early culling, temporarily increasing beef supplies but reducing future production capacity. The cow herd liquidation phase typically precedes a multi-year production decline.
Feed costs, representing 60-70% of finishing costs, are moderate at $180/st for corn and $380/st for soybean meal. Lower feed costs versus 2025 support feedlot margins and incentivize placement weight gain.
Beef demand remains historically strong, with per-capita consumption at 58 pounds annually. However, high retail prices ($7-8/lb for ground beef) are beginning to erode demand elasticity.
Price projections for H2 2026 cluster at $175-195/cwt.
Live cattle buyers should secure H2 requirements at $180-190/cwt through forward contracts. The tight cow herd provides price support. For packers, consider formula pricing arrangements to secure supply. Budget $175-200/cwt for 2027 as herd rebuilding begins.