Import restrictions will weigh on cattle markets
The latest World Agricultural Supply and Demand Estimates report for United States red meat and poultry production for 2026 is forecast lower than in 2025 and prices likely will stay higher for 2026 for beef.
Beef production was forecast lower on tighter cattle supplies, fewer available fed steers and heifers due to import restrictions on cattle from Mexico, and reduced slaughter of cattle.
The latest report also reflects the suspension of live cattle, horse and bison imports from Mexico due to recent detections of New World screwworm in southern Mexico.
Forecasts in this report reflect the suspension and an absence of an official timeline for reopening U.S. ports of entry for livestock and it is assumed restrictions will remain in place indefinitely, the report indicated.
Closure of the Mexican border will further reduce feeder cattle supplies making availability, particularly for Southern Plains operations, even tighter, according to Glynn Tonsor, professor in the department of agricultural economics at Kansas State University. Absent of other developments, this will also push U.S. feeder cattle prices higher in response to lower supplies.
“It also seems worth noting that here in mid-May 2025 it appears increasingly likely that collaborative, good-faith effort over the past few months by both Mexican and U.S. stakeholders could have produced a more favorable situation,” Tonsor said. “That is, there is a real possibility of substantial net economic harm for stakeholders in both countries that may have been avoided or at least partially mitigated with better collaboration. Time will tell but my ‘gut-instinct’ tells me in a few months many may look back with regret about not taking more active and collaborative efforts earlier in 2025.”
Price forecast raised
Cattle price forecasts in 2025 were raised in May on recent price strength seen through early May and tighter fed cattle supplies expected during the second half of the year.
Beef production forecast was lowered as higher dressed weights more than offset reduced steer and heifer slaughter due to the suspension of cattle imports from Mexico. The May projection for beef production on an annual basis was estimated at 26,423 million pounds compared to the April projection at 26,700 million pounds. In 2026, beef production is estimated at 25,140 million pounds.
For 2026, beef exports are forecast to be lower than the current 2025 forecast, as tighter domestic supplies likely will reduce international competitiveness.
Cattle prices in 2026 are forecast to be above 2025 on tighter cattle and beef supplies.
The May 2025 projection cost for the 2/5-area direct sales at $214.51 per hundredweight. The 2026 forecast is for $223 per hundredweight.
Whether this will trigger expansion of the herd numbers remains to be seen.
“This depends on who you ask. For producers torn or ‘indifferent’ to expansion higher feeder cattle prices may lead them to be less likely to hold back heifers and rather ‘take the bird in hand’ (higher sales prices),” Tonsor said. “Conversely, for sustained expansion to occur a sizeable number of operations have to believe it is in their profitability interest to defer current revenue (by selling heifers at higher prices) in favor of expanding their production. Hence the higher feeder cattle prices, if translated into projections or expectations for higher prices going forward, may lead this group to pull the trigger on expansion.
Pork
Pork production is forecast higher on increased hog supplies, primarily driven by steadily increasing rates of pigs per litter and higher dressed weights. It also noted that production is reduced at a slower rate of slaughter expected for the second half of the year although it is slightly offset by increased production in the second quarter.
Hog price forecasts were adjusted to reflect the net price published for producer sold barrows and gilts in the USDA’s National Daily Direct Hog Prior Day Report, due to the discontinuation of the National Daily Base Lean Hog Carcass Slaughter Cost report in May 2025.
Pork prices for 2025 are estimated at $65.65 per hundredweight and is projected at $64 per hundredweight in 2026.
Pork production on an annual basis is estimated at 27,996 million pounds in May and 28,370 million pounds in 2026.
Final observation
Past decisions regarding breeding and expansion come to play leading to this lower expected production for red meat and poultry outcome by WASDE, Tonsor said.
Livestock producers will have to continue to keep a sharp pencil at hand, the ag economist said.
“I always say you have to know your production costs, implied break-evens, and stay informed of factors that materially alter those factors,” he said. “The constant barrage of ‘new developments’ and elevated macroeconomic uncertainty further highlight the need and value in this.”
Dave Bergmeier can be reached at 620-227-1822 or [email protected].
