Livestock prices shine as unknowns lurk
Livestock producers have enjoyed a nice ride with their markets, but uncertainties remain.
When the U.S. Department of Agriculture released its February World Agricultural Supply and Demand Estimates, the report included several more explanations than usual–particularly in the livestock section.
The nation’s beef cow numbers are at 27.9 million beef cows in the United States as of Jan. 1, 2025, which is a 1% drop from a year ago, according to the cattle inventory reported issued Jan. 31. Overall, the head count is 86.7 million head and cows and heifers that calved totaled 37.2 million.
Glynn Tonsor, professor in the department of agricultural economics at Kansas State University, does not expect a beef herd expansion until next year.
“For some time I have viewed the summer of 2026 as being the soonest we will see ‘market relevant’ levels of national herd rebuilding,” Tonsor said.
Beef
Cattle prices were raised for all four quarters in 2025, WASDE states, and steer prices are estimated at $201 per hundredweight for the year. That number was based on the simple average of months for the 5-area direct report compiled by USDA.
In the WASDE summary, the resumption of cattle imports from Mexico from approved facilities after a stoppage in late 2024 and early 2025 because of the New World screwworm was noted.
“I do not expect much aggregate impact as it is mainly timing of feeder cattle flows that have been adjusted due to bans and are now reopening,” Tonsor said about beef imports from Mexico.
Other information indicated that higher placements are expected for the year and processing will occur in the second half of the year, along with higher dressed weights.
Beef exports for 2025 were raised to nearly 2.8 billion pounds based on the increase in production and strong global demand, while beef imports are now projected at 4.4 billion pounds. Whether or not that occurs depends on policies, most notably on tariffs, that may or may not be implemented by the Trump administration, Tonsor said.
“The strength of the U.S. dollar, global economic strength, and final details in trade relationships are all at play, with elevated uncertainty here in 2025,” the ag economist said. “While the U.S. beef cattle industry has a very strong global position regarding offering of high-quality, grain-finished beef, the above points persistently impact the value and volume of both beef exports and beef imports.”
Pork
For pork, prices were raised for the first quarter as a reflection of a recent price upswing compared to a year ago.
The price is expected to be about $64 per hundredweight on an annual basis. However, the peak prices are estimated in the first three quarters at $62, $66 and $70 per hundredweight, respectively, before falling to $56 in the fourth quarter. The USDA expects higher weights, too, and that, it believes, will likely offset the slower rate pork processing numbers in the first quarter. Pork production is targeted at 28.5 billion pounds.
Pork exports were lowered for the second half of the year on slower-than-previously expected growth in several key export markets. The pork industry has benefited for a couple of decades by growing foreign demand for U.S. pork, Tonsor said. Some examples such as Mexico importing hams stand out as historic success stories on market development, he said.
“Producers first should recognize the recent importance of export demand on their bottom line and subsequently recognize we now operate in a period of elevated uncertainty that likely will make prices and margins for them more volatile as well,” Tonsor said.
Poultry
The 2025 broiler price forecast was unchanged, as a lower forecast for the first quarter based on recent prices was offset by raised price expectations for the second half of the year.
The price for broilers was estimated at 132 cents per pound. The turkey price forecast was lowered because of weaker demand at 97 cents a pound, a reduction of 2 cents from a month earlier.
Egg prices were raised for all four quarters as the flock tries to recover from the highly pathogenic avian influenza-related reductions that were noted earlier by USDA. “Supply disruptions regarding egg production continue and that makes it hard to forecast the duration of elevated retail prices,” Tonsor said. Egg prices in February soared to 444 cents a dozen. Just a month ago, WASDE projected it at 294 cents per dozen. The peak is expected this quarter at 725 cents a dozen.
Keep an eye in costs
Each livestock producer, regardless of which industry he is in, needs to know his costs and implied breakeven prices, Tonsor said. “One thing that is growing in importance early in 2025 is interest rate uncertainty. Use that as an excuse to have another visit with your financial partners.”
Trade in play
Tonsor said all sectors should keep in mind the unknowns of a potential significant change in trade policy particularly with tariffs.
“U.S. agriculture collectively has benefited over recent decades by having its products available not only domestically, but internationally,” he said. “This allows products to flow ‘to their most valuable market’ and ultimately increases the value of products U.S. agriculture provides.
“That said, as society elects to at least partially step away from international trade ‘the world gets smaller,’ market availability declines and overall demand for U.S. agricultural products is reduced.”
He also said that as February came to a close, layoffs in the federal government and departmental restructuring should serve as a potential wake-up call for some in U.S. agriculture who may take market price reports, inventory reports and other reports for granted because they underpin how modern production, marketing and risk management occur, he said.
The ag economist highlighted those examples to encourage producers and others to gain an increased understanding of what data products and information resources are used “behind the scenes” and how they are foundational to a producer’s operational decisions.
“Many of these now underpin increasingly-used risk management strategies that were not even available a couple decades ago,” Tonsor said. “If and when those foundational pieces are removed or hindered then overall market efficiency is likely reduced and with it increased volatility in U.S. ag markets may be expected.”
Dairy
In 2025, milk production was reduced due to lower expected cow inventories. On a fat basis, domestic use was lowered as less production and lower imports tightened supplies.
Milk and dairy product price exports were reflected on the updated price formulas of the Federal Milk Marketing Order, as published in the Federal Register in January by the Agricultural Marketing Service.
Butter, nonfat dry milk and whey prices were all lowered. The cheese price was lowered on recent prices and tight inventories from 2024 and expected to carry into 2205. Class III and Class IV prices in 2025 were lowered. The all-milk price estimate was raised to $22.61 per hundredweight based on data through December. The all-milk price forecast for 2025 was lowered to $22.60 per hundredweight.
Dave Bergmeier can be reached at 620-227-1822 or dbergmeier@hpj.com.
