U.S. Beef Ranch Brief

# U.S. Cattle Supply Tightness, Elevated Beef Prices, and Slow Herd Rebuilding: An Updated Analysis of 2025-2026 Market Outlook The U.S. beef industry remains at a critical juncture, characterized by an unusually tight cattle supply, soaring beef prices, and a sluggish pace of herd rebuilding. As of early 2026, cattle inventories hover near **86.7 million head**, a figure reminiscent of the early 1950s, underscoring the severity of the supply crunch. Recent developments have only intensified the complexity of this landscape, indicating that the "new normal" of elevated prices and constrained supplies is likely to persist into late 2026 unless significant environmental, biological, or policy shifts occur. ## Persistent Supply Constraints: Environmental, Biological, and Climatic Challenges ### Drought, Wildfires, and Forage Shortages Long-term drought conditions continue to be the primary driver behind the stagnant herd growth. Major grazing regions—including the Western U.S., Southern Plains, and Great Plains—are experiencing water shortages that have decimated forage production. Reports from agricultural sources and social media, such as **YouTube videos**, depict skyrocketing hay and alfalfa prices; for example, **Colorado** has reported **record hay costs** due to dwindling water resources. These elevated costs compel many ranchers to cull herds or delay herd expansion plans, maintaining the supply tightness. Adding to environmental stress, **wildfires** have ravaged pasturelands across several states. Recent reports from Reuters highlight that extensive fires have "burned grazing lands to the point of being a sea of sand," forcing ranchers to rely heavily on expensive supplemental feeds. These land losses not only reduce immediate forage availability but also slow herd rebuilding efforts, which sustains high beef prices and tight supplies. ### Biosecurity and Disease Risks Biosecurity concerns remain heightened. The recent detection of **New World Screwworm (NWS)** near the Texas-Mexico border has increased vigilance. While **Mexico** reports a **57% decrease** in NWS cases, the proximity—only 215 miles from key U.S. cattle regions—keeps the threat active. States like **Texas** and **Colorado** have responded with **disaster declarations** to bolster biosecurity measures. The USDA’s **Grand Challenge** initiative is actively working on **biological controls**, **genetic research**, and **disease prevention strategies** to mitigate these threats. However, the risk of infections and potential export disruptions continues to cast uncertainty over herd recovery timelines. ### Climatic Disasters and Winter Losses Extreme weather events have inflicted significant herd losses. For instance, Arkansas recently reported **over $24 million** in cattle losses due to severe winter storms. Such climatic disasters further complicate herd rebuilding, prolonging the supply constraints and supporting elevated beef prices. ## Market Dynamics: Prices, Volatility, and Industry Adaptation ### Record Beef Prices and Market Fluctuations Demand-supply imbalances have pushed **retail beef prices** to approximately **$8.45 per pound**, marking a **16.4% increase** from the previous year. Certain cuts have seen **price hikes of up to 36%**, reflecting persistent scarcity. Wholesale markets, like the **Choice cutout**, have approached **$365 per hundredweight**, signaling ongoing tightness. Market volatility remains intense: - **Cattle futures** have swung between **up 45 cents and 90 cents** daily, highlighting ongoing uncertainty. - Industry analysts question whether **$250 cash** prices can push prices even higher amid persistent shortages. Reports from **"Markets Now" (February 18)** emphasize the importance of **risk management strategies** such as hedging and futures trading to navigate these swings. Futures markets continue to hold a **bullish outlook**, underpinned by expectations of sustained shortages and high demand. ### Industry Responses: Capacity Cuts and Technological Innovations Major processors are actively **reducing capacity** to adapt to market conditions. For example, **Tyson Foods** announced the closure of its **Lubbock Feeders** plant after over 70 years, which further constricts supply and helps sustain high prices. Producers are increasingly deploying **advanced reproductive technologies** and **genetic improvements** to expedite herd rebuilding. Notably, the recent **"DocTalk 719"** YouTube video titled **"Selecting a bull with Lorna Marshall"** underscores the industry's focus on **bull-selection** and **genetic strategies** to enhance herd productivity. These efforts aim to accelerate herd growth, although environmental and biological constraints limit their immediate impact. Additionally, land management practices and risk mitigation via **futures contracts** and **hedging** are becoming more prevalent, helping stabilize revenues amid volatile markets. ### Data on Feedlot Inventories and Placements Recent USDA and industry reports confirm **declining cattle on feed** and **fewer placements** into feedlots compared to previous years. These indicators reinforce the ongoing tightness of supplies and support the bullish price outlook. The **cattle on feed** figures remain at historically low levels, emphasizing the sluggish pace of herd expansion. ## Trade, Policy, and Global Market Influences ### Import Quotas and Export Opportunities Argentina recently announced a **quintupled import quota** of **80,000 metric tons**, enacted through an executive order signed by **President Trump**. This move aims to alleviate domestic shortages but could **delay herd rebuilding**, as increased imports compete with domestic production. On the export front, agreements with **Taiwan** and **Indonesia** are expanding opportunities. However, **China’s ongoing beef ban** continues to limit export avenues, constraining the industry's ability to leverage international markets for herd recovery. ### Trade Tensions and Tariff Movements A notable recent development involves **President Trump’s** announcement of **a 10% global tariff increase** affecting Australian beef and wine imports. Importantly, **beef was explicitly exempted** from this tariff, as recent trade updates confirm, preventing additional costs that could further tighten supplies domestically. Nonetheless, this move is part of broader **trade tensions**, with potential retaliatory actions from Australia and other beef-exporting nations. These geopolitical dynamics add layers of complexity to global supply chains and could influence price stability. ## Recent Data and Near-Term Outlook ### Updated Market Data and Expert Forecasts The latest **cattle on feed** and **placements** reports confirm **continued declines in feedlot inventories**, reinforcing the persistent supply tightness. Industry experts, including insights from **Cattle HQ Live** and **2026 Market Predictions** by Patrick Linnell, suggest herd rebuilding will remain sluggish through late 2026 unless there are significant breakthroughs in forage recovery, disease control, or policy support. ### Market Volatility and Short-Term Trends Recent activity underscores ongoing volatility: - **Sharp declines** in cattle futures and spot markets reflect persistent uncertainty. - Market reports, such as the **February 26, 2026** update, indicate that **cattle prices** remain **elevated and bullish**, with few signs of imminent relief. ### Industry Implications - **Producers** face high prices but must contend with environmental risks, disease threats, and market volatility. - **Consumers** should anticipate **continued elevated beef prices**, potentially prompting shifts toward alternative proteins. - **Policymakers** are encouraged to consider measures supporting herd rebuilding, including environmental management, disease mitigation, and trade facilitation. ## Current Status and Future Outlook The supply-demand imbalance persists, with **high prices and volatility** expected into late 2026. While the industry employs technological advances and capacity adjustments, environmental adversities, disease threats (notably NWS), and trade policies continue to hinder rapid herd recovery. **Key takeaways:** - **Supply constraints** driven by drought, wildfires, disease risks, and extreme weather will keep cattle inventories at historically low levels. - **Market prices** are at or near record highs, with ongoing volatility influencing industry and consumer behaviors. - **Industry adaptations**, including genetic improvements and capacity adjustments, are underway but insufficient for immediate herd expansion. - **Trade and policy developments**, including import quotas and tariff exemptions, influence supply and pricing dynamics, with recent exemptions preventing further domestic inflation. **In sum,** unless substantial environmental recovery, disease control, or supportive policy measures arise, the U.S. beef industry will likely maintain tight supplies and elevated prices through late 2026. The "new normal" of high prices and limited herd growth appears to be firmly established. --- ### Recent Market Highlights - **February 26, 2026:** Market data confirms continued declines in cattle inventories, with futures remaining bullish amid volatility. - **Price Movements:** Retail beef prices hover around **$8.45/lb**, with certain cuts up to 36% higher. - **Trade Developments:** Argentina’s increased import quota aims to ease shortages, while tariff exemptions prevent domestic price inflation. - **Capacity Adjustments:** Major processors are trimming capacity, and producers are adopting genetic and land management innovations to accelerate herd rebuilding, albeit gradually. --- **Overall,** the U.S. beef market remains in a delicate, turbulent equilibrium—fragile and uncertain but resilient amidst ongoing environmental, biological, and geopolitical challenges. Stakeholders must stay vigilant as the industry navigates these complexities into late 2026 and beyond.

# Taiwan-U.S. Trade Agreement and Market Dynamics: Navigating Opportunities Amid Record-High Prices In a landmark move, Taiwan and the United States have solidified a significant trade agreement that aims to deepen economic ties, particularly in the agricultural sector. This pact, characterized by a **uniform 15% tariff on specific U.S. meat products** and **partial liberalization of Taiwan’s beef and pork markets**, arrives at a critical juncture marked by **historically high U.S. livestock prices, extremely low inventories**, and ongoing supply disruptions. The agreement not only opens new doors for U.S. exporters but also underscores Taiwan’s strategic effort to diversify its import sources and bolster regional food security. ## Key Components of the New Trade Framework This agreement represents a strategic shift in Taiwan’s approach to trade, emphasizing **modernization, diversification, and resilience**: - **Uniform 15% Tariff**: - Replaces previous variable or higher tariffs, providing **price stability and predictability**. - Significantly enhances **competitiveness of U.S. beef and pork** in Taiwan’s market, laying the groundwork for increased exports over the coming years. - **Expanded Market Access**: - U.S. beef and pork now face **fewer restrictions**, with a broader selection of cuts and processed meats permitted entry. - Certain **sensitive categories**, such as highly processed items or specific cuts, may still encounter restrictions, but **overall access is considerably improved**. - **Safeguard Measures**: - Taiwan retains **trade safeguard mechanisms** to prevent sudden surges that could threaten domestic producers. - This **delicate balance** aims to **foster long-term growth** while maintaining **industry stability**. - **Diversification Goals**: - The agreement aligns with Taiwan’s broader strategy to **reduce reliance on traditional suppliers** and **enhance food security** through **regional diversification**. - U.S. products are positioned as **a key component** of Taiwan’s evolving supply chain, providing a strategic alternative amid regional supply constraints. Recent global trade developments further influence this landscape. Notably, a **new 10% global tariff** on certain goods, with exemptions for beef, has come into effect, signaling a **changing environment of trade barriers** that could impact U.S. exports across multiple markets, including Taiwan. ## Market Fundamentals and Industry Developments The timing of this agreement coincides with **extraordinarily bullish conditions** in U.S. livestock markets, driven by **supply constraints and market volatility**: ### Market Bullishness and Supply Tightness - **Futures Prices**: - U.S. cattle futures, including live and feeder contracts, have surged **beyond $250 per hundredweight**, reaching levels rarely seen historically. - Intraday swings of **45 to 90 cents** reflect **robust bullish sentiment**, but also high volatility amid market nervousness. - **Supply Constraints**: - U.S. cattle inventories are at their **lowest levels in approximately 75 years**. - Contributing factors include **drought-induced pasture shortages**, **herd liquidation**, and **slower slaughter rates**. - **Marketings and Feedlot Inventories**: - USDA data indicate **January marketings approximately 13% below previous estimates**. - February figures show **feedlot inventories declining roughly 2% year-over-year**, signaling ongoing herd reduction efforts. ### Disruptions Amplifying Tightness - **Feedlot Closures**: - The historic **Lubbock feedlot**, operational for over 70 years, recently announced its closure, marking a significant regional supply and employment impact. - **Wildfire Impacts**: - Severe wildfires across California and the Southwest destroyed grazing lands, forcing ranchers to seek costly alternative feeds. - These disruptions **exacerbate supply constraints**, accelerating herd liquidation. - **Export Trends**: - Despite high prices, **U.S. beef exports in November** totaled around **190 million pounds**, down **about 25% compared to the same period in 2024**. - Exports to China declined sharply by nearly **38 million pounds**, primarily due to tariffs and regional competition. - The new Taiwan-U.S. agreement offers a strategic opportunity to **expand market share in Asia’s supply-constrained environment**, especially with **favorable tariffs and eased restrictions**. ### Recent Market Volatility - **Sharp Market Declines**: - On Thursday, February 26, 2026, the market experienced a notable **sharp decline**—a reflection of ongoing volatility amid bullish fundamentals. - For example, **May corn** rose 1½¢ to $4.43½ per bushel, while **May soybeans** fell 1½¢ to $11.63½ per bushel, illustrating the broader commodity market fluctuations. - Such intraday swings highlight the **uncertainty and nervousness** gripping traders and producers alike. ## Industry Response and Operational Strategies Given the ongoing tightness and volatility, stakeholders are pursuing strategies to **enhance resilience** and **maximize opportunities**: - **Supply Chain Resilience**: - Investments in **infrastructure, logistics, and inventory management** are critical, especially to mitigate disruptions caused by wildfires, drought, and regional closures. - **Producer Training and Quality Assurance**: - The Nebraska Beef Quality Assurance (BQA) program has scheduled its **2026 dual certification trainings**, aiming to improve beef quality, safety, and traceability. - **Feed Management**: - Resources like **"272: The Science Behind Hay Testing for Your Cattle Operation"** are vital for optimizing feed quality amid tight supplies, ensuring animals receive balanced nutrition at a lower cost. - **Market Monitoring**: - Industry players are advised to **closely monitor futures markets and export trends**, enabling strategic timing for sales and market entry. ## Outlook and Strategic Recommendations The convergence of a **favorable trade environment** with **bullish market fundamentals** presents both **opportunities and challenges**: - **For U.S. Exporters**: - The **predictable 15% tariff** and **expanded market access** position U.S. beef and pork favorably in Taiwan. - However, **managing supply risks**, including herd liquidation and regional disruptions, remains critical to fully capitalize on these opportunities. - **For Taiwan**: - The move toward **market liberalization and diversification** enhances **food security** and **consumer choice**. - The agreement could **set a regional precedent**, encouraging neighboring nations to pursue similar liberalization efforts. - **Regional and Global Implications**: - The U.S. aims to **gain market share in Taiwan**, potentially displacing regional competitors and influencing Asian prices. - The recent **global tariff exemption for beef** and projections of **high prices into 2026** reinforce the U.S. as a **primary supplier** in the Asian market. ### Recommendations for Stakeholders - **Producers and exporters** should **capitalize on tariff predictability** while **actively managing supply chain risks**. - **Investing in infrastructure, feed efficiency, and quality assurance** will be crucial for maintaining competitiveness. - **Monitoring global trade policies and regional market developments** will enable strategic planning and timely responses. ## **In Summary** The **Taiwan-U.S. trade agreement** signifies a pivotal development amid **record-high prices and persistent supply constraints**. It offers **enhanced market access and reduced tariffs**, providing U.S. exporters with a valuable opportunity to **expand in Asia’s tight supply environment**. Simultaneously, the agreement supports Taiwan’s goals of **food security and regional diversification**. However, the **bullish fundamentals**—including **low herd inventories, wildfire impacts, and export declines to China**—suggest that **supply tightness will persist into 2026**. Stakeholders must **navigate ongoing volatility**, **manage risks proactively**, and **invest strategically** to maximize the long-term benefits of this evolving landscape. As the global market continues to shift, **adaptability and resilience** will be vital for success in the dynamic beef and pork sectors, with Taiwan and the U.S. positioned to play influential roles in shaping regional trade and supply chain stability.

# Emerging New World Screwworm Cases in Mexico and Texas Trigger Urgent Biosecurity and Market Turmoil The re-emergence of **New World Screwworm (NWS)**—a parasite long considered eradicated from North America—has rapidly escalated from localized border outbreaks to a significant regional crisis. What began as a concern confined to Mexico has now expanded inland into Texas, marking a pivotal turning point that threatens animal health, regional trade stability, and the economic viability of the North American livestock industry. --- ## From Border Outbreaks to Inland Incursion: A Critical Turning Point In **early March 2026**, authorities in Mexico confirmed **multiple active NWS outbreaks** across border states including Veracruz and Tamaulipas. These outbreaks have exposed critical vulnerabilities in regional surveillance, especially in rural and resource-limited communities where early detection remains challenging. Notable developments include: - A **six-day-old calf diagnosed with NWS** in Veracruz, highlighting the parasite’s threat to the most vulnerable livestock. - The outbreaks prompted urgent calls for **enhanced monitoring, quarantine protocols, and containment measures**. Most alarming was the **first confirmed inland detection of NWS approximately 215 miles into Texas**. This represents a historic development, signaling that NWS is now capable of surviving and potentially establishing a self-sustaining population well within U.S. borders. Such inland incursion **raises serious concerns** about the parasite’s ability to become endemic, which could complicate eradication efforts and jeopardize herd health. ### Significance of the Inland Detection - It **raises fears** that NWS could become entrenched in inland regions, requiring **expanded surveillance, rapid response, and containment strategies**. - It **threatens regional trade**, as authorities may impose restrictions to prevent further spread. - Texas Governor Greg Abbott responded by **declaring a statewide disaster**, mobilizing emergency resources and intensifying containment efforts. --- ## Intensified Control Measures and Ongoing Challenges Despite decades of control efforts—including **sterile insect release (SIT)** programs, targeted insecticide applications, and surveillance—this inland detection underscores **gaps in existing strategies**. Mexican authorities emphasize that **any lapses could reverse recent progress**. A comprehensive response has been swiftly launched: - **Enhanced border inspections** and **strict quarantine protocols** for livestock, feed, and equipment from Mexico. - Deployment of **specialized surveillance teams** utilizing **trapping, sampling, and early detection techniques** at border crossings and inland hotspots. - Continued **application of insecticides**, alongside **release of sterile insects** and **biological control measures** aimed at suppressing NWS populations. - The USDA’s **Grand Challenge initiative** has been **accelerated**, focusing on **biological control innovations**, **genomic diagnostics**, and **advanced detection technologies** to support eradication. - **Farm-level biosecurity protocols**—including **movement restrictions**, **disinfection procedures**, and **veterinary monitoring**—are being **reinforced** across vulnerable regions. - **Public awareness campaigns** are underway to **counter misinformation**, **maintain market confidence**, and **prevent panic-driven reactions**. These concerted efforts aim to **prevent NWS from establishing a persistent, damaging population** that could devastate livestock productivity, disrupt trade, and threaten regional economies. --- ## Market Volatility and Economic Impacts The detection of NWS inland, coupled with ongoing biological threats, has **intensified volatility** in North American cattle markets. Producer sentiment and trader behavior are increasingly influenced by **fears of herd reductions**, **trade restrictions**, and **uncertainty about containment success**. ### Recent Market Movements - **Cattle futures** have surged approximately **$3.50 to $4.40 per hundredweight** since mid-January 2026, with **weekly gains exceeding $6.35**, driven by **herd reduction fears** and **trade concerns**. - **Boxed beef prices** are approaching **$347.45 per hundredweight**, supported by **herd culling**, persistent **drought conditions**, and **logistical disruptions**. - **Calf auction prices** have declined, with **steer and heifer calves trading 5.00 to 20.00 lower**, reflecting **buyer's hesitancy**. - **Processing volumes** in January have **hit their lowest levels in four years** due to **plant closures**, **labor shortages**, and **strict health protocols**. - **Cattle placements** in feedlots are down roughly **1%**, as producers **hold cattle longer** amid **market uncertainty**. ### External Factors Amplifying Instability - **Brazil’s rise as the top global beef exporter in 2025** has altered **international trade dynamics**, affecting U.S. supply and demand. - **Brazil’s soybean exports** are projected to **decline by about 3% in 2026**, likely **raising feed costs** and prompting **herd management adjustments**. - Recent **severe weather events**, including a **cold snap** across parts of the U.S., have **slowed weight gains** and **reduced feed efficiency**, further tightening supplies. - The **Arkansas winter storm** caused **over $24 million in damages**, illustrating how **climate shocks** compound biological threats. - **Wildfires** across the Midwest and South have damaged grazing lands, forcing ranchers to seek expensive feed, further constraining supplies. The **U.S. cattle herd**, now at a **75-year low**, continues to underpin **high beef prices** and **tight supplies**, with forecasts suggesting **prices will remain elevated** amid **herd reductions** and **logistical hurdles**. --- ## Industry and Policy Responses: Navigating a Complex Landscape The crisis has prompted **industry adaptations** and **policy updates**: - The **Lubbock Feeders** operation, a historic Texas ranching facility, announced its **closure after 70 years**, citing **economic pressures** and **market instability**. - **Processing capacity** remains constrained, with **plant shutdowns** and **labor shortages** impacting slaughter volumes. - **Biological control investments** and **diagnostics development** are being prioritized through **federal and industry R&D** to better detect and eradicate NWS, aiming to **restore supply stability**. - A **notable recent policy development** is that **beef products are explicitly exempted from the new 10% global tariff** enacted Tuesday, which aims to impose tariffs on a broad range of imports. This exemption **may help stabilize exports** and **provide some relief** amid the ongoing crisis. --- ## Practical Resilience Measures and Industry Initiatives In response to these multifaceted challenges, industry groups are implementing targeted programs to bolster resilience: - **Nebraska Beef Quality Assurance (BQA)** has released its **2026 schedule for dual certification trainings**, emphasizing **biosecurity** and **quality assurance** to enhance herd health and management practices. - A recent resource titled **"272: The Science Behind Hay Testing for Your Cattle Operation"** offers insights into **evaluating feed quality**, helping producers **manage feed shortages** and **reduce costs**. - **Hay testing** is increasingly vital as drought conditions and wildfires reduce grazing capacity, making **accurate nutritional assessments** crucial for **maintaining herd performance** and **biosecurity**. --- ## Near-term Outlook and Strategic Imperatives The **inland detection of NWS** underscores the **urgent need for bilateral cooperation** with Mexico. **Data sharing**, **joint containment strategies**, and **regional coordination** are crucial to **preventing the parasite’s establishment** and **minimizing economic impacts**. **Sustained investments** in **biological controls**, **genomic diagnostics**, and **climate-resilient practices** remain essential to **enhance responsiveness** and **reduce future risks**. Effective **public communication** is vital to **counter misinformation**, **maintain consumer confidence**, and **stabilize markets**. ### Near-term expectations include: - Continued **surveillance, rapid response, and containment efforts** across border hotspots and inland zones. - Persistent **market volatility** until **significant eradication progress** is achieved. - **High beef prices** are expected to **remain elevated** due to **herd reductions** and **logistical disruptions**, prompting cautious but strategic planning among producers. --- ## Broader Implications and Industry Resilience This crisis highlights the **interconnectedness of animal health, trade, and economic stability**. The livestock industry must remain **vigilant**, **innovative**, and **collaborative** to **navigate current challenges** and **prepare for future biological threats**. The situation emphasizes the importance of **scientific research**, **international cooperation**, and **climate resilience** in safeguarding **North America’s livestock systems** against unpredictable pests and diseases. --- ## Current Status and Final Thoughts The **inland detection of NWS in Texas** represents a **pivotal moment** in North American livestock health management. It demonstrates that **biological threats are unpredictable** and require **coordinated, science-based responses**. While **eradication efforts are actively underway**, the scenario remains **fluid**, with **market stability heavily dependent** on the **success of containment and biosecurity measures**. This episode serves as a **wake-up call** for the industry, emphasizing that **resilience**, **adaptation**, and **continued innovation** are essential to **protecting animal health and economic stability** amid an increasingly complex and unpredictable environment. --- ## Recent Industry Insights - **Arkansas-based beef expert** notes that **rising beef prices** are likely to **persist** due to **herd reductions and supply constraints**, urging producers to **maintain vigilance**. - According to **Josh Maples**, Assistant Professor & Extension Economist at Mississippi State University, **cattle futures** have surged significantly, reflecting **market fears** and **uncertainties** that may last until **eradication efforts** show measurable progress. --- ## Implications for the Future This unfolding crisis underscores the **fragility and interconnectedness** of North American livestock systems. Maintaining **effective biosecurity**, fostering **international cooperation**, and investing in **scientific innovations** are vital to **mitigating current impacts** and **building resilience** against future threats. The recent developments reinforce that **vigilance, adaptability, and collaborative action** are crucial in safeguarding the region’s animal health, trade stability, and economic well-being in the face of unpredictable biological challenges.