2026 could be another record breaking year for cattle prices. That’s according to the CattleFax’s 2026 Outlook released during CattleCon in Nashville, Tenn.
CattleFax CEO Randy Blach says it is likely fed cattle futures prices will go back and test or exceed the all-time highs set in mid-October of 2025. With inventory at a 75-year low and the beef cows numbers down 285,000 that will mean tighter supplies ahead.
“The U.S. cattle and beef industry enters 2026 with strong but volatile market conditions, as historically tight cattle supplies, record-setting beef demand and elevated policy and weather uncertainty continue to support prices, even as markets appear to near cyclical highs,” says Mike Murphy, CattleFax chief operating officer. “Tight inventories and exceptional demand remain the dominant forces shaping the market; however, producer demographics, high input costs, and policy uncertainty point to a slow and measured expansion phase.”
Strong Fundamentals, Shifting Dynamics
Kevin Good, vice president of market analysis at CattleFax, reports the U.S. beef cow herd decreased 280,000 from a year ago in the latest USDA semi-annual cattle inventory report, while dairy cow inventories increased by 190,000 head.
Cattle availability will remain constrained in the first half of 2026 due to limited feeder cattle supplies. Fed slaughter is projected to decline by 600,000 head, primarily early in the year, and non-fed slaughter is expected to remain historically tight at 5.6 million head. Total commercial beef production is projected to decline again in 2026, albeit at a slower pace than in 2025. With imports up 5% and exports down 5%, U.S. per-capita beef supplies are forecast 0.2 lbs. larger in 2026 to 59.2 lbs., the largest since 2010.
Record Weights Making Up for Lost Slaughter
Total fed cattle slaughter was down last year by 1.4 million head in 2025 at 1.4 million head.
“That’s a big one-year decline,” Blach summarizes. “And this year, you know, fed slaughter could be down anywhere from 600,000 to 1 million more.”
However, has been offset by heavier carcass weights, which in essence created virtual cattle to temper the tight supplies according to Blach.
“In 2024, carcass weights were up 27 lb. That was the equivalent of harvesting another million head of fed cattle. Last year, carcass weights were up 25 lb., which is equivalent to harvesting another 900,000 head of cattle on an annual basis. This year, they’re off and running again. I mean, we could easily end up with weights up another 10 to 15 lb. this year.”
Beef Demand Also Key to Strong Prices in 2026
Retail beef demand remained historically strong in 2025, with record retail prices supported by steady consumption and exceptional product quality. Consumer preferences continue to favor high-protein, nutrient-dense foods, reinforcing demand even as higher prices move through the supply chain.
Good says consumer demand for beef is at a 40-year high, which is also adding to their cattle price outlook.
He also attributes that to a healthy economy, nearly full employment and rising wage levels that are beating inflation, so consumers have money to spend.
“We look at how many minutes it takes to buy a pound of beef and that number is back to the level we were back at the last cycle peak in 2014 to 2015,” Good says. “At first blush that looks like beef may be getting too pricey. At the same time, our consumers still consume about 59 lb. So this rally the last couple years, the bottom line is big part of it’s been demand driven. So, we really don’t see a push back yet.”
Plus, with an average consumer spending 14 minutes of work to buy a pound of beef, it is still a bargain.
“With 84% of fed cattle grading Choice or higher and 12% grading Prime, the industry is well positioned to sustain premium pricing,” Good notes. “Beef demand continues to be anchored by exceptional quality and strong consumer confidence in beef as a premium protein. Even as markets adjust and trade flows shift, the fundamentals supporting long-term beef demand remain solid.”
Fed Cattle Prices Steady to Slightly Higher in 2026
CattleFax forecast the average 2026 fed steer price at $224/cwt., nearly steady from the $225 average in 2025. Risk will increase later in the year as markets anticipate building supplies in 2027.
The range in prices may be narrower this year than in 2025 as well. “A year ago we had a big range in prices,” Blach summarizes. “Prices ranged from $195 at the lows in January at convention a year ago to $245. So, we had $50 range in fed cattle prices in 2025.”
All cattle classes are expected to trade higher, with 800-lb. steer prices expected to average $335/cwt., and 550-lb. steer prices averaging $440/cwt. Utility cows are expected to average $155/cwt., with bred cows at an average of $4,000/cwt.
Feeder Cattle Prices to Top Last Year
Cow-calf producers are expected to retain the strongest leverage as the cycle turns, supporting continued profitability for several more years.
“Cost of gains is as low as they are. We’re still putting a lot of gain on for around a $1 a pound,” Blach says. “So feeder cattle prices are stout. We’ve got a lot of cattle out here trading at $360, $370 right now, you know, with where the indexes are trading. So, we’re going to have very, very strong levels as we come through here.”
The additional tightness of supply in 2025 helped push prices to record levels, largely due to the closure of the Mexican border to feeder cattle imports due to New World screwworm (NWS). That took 1.2 million head out of the U.S. cattle feeding system.
However, Blach says the border will be re-opened at some point, which will have a negative impact on prices.
“We are at cycle highs based on everything that’s going on out here,” he summarizes. “So, when you’re typically there, you’ll get some correction off these levels. When we do see trade normalize, from maybe these tariffs, all the trade wars that we’ve got going on, all that stuff kind of normalize and we do see the Mexican border reopen and we get that flow of cattle, I suspect we’ll go through a correction in all these markets that we all just need to be prepared for.”
Risk Management Key
Both Good and Blach agree that the high prices outlook doesn’t mean profits will exceed 2025. Margins have gotten much tighter moving up the supply chains for backgrounders and feedlot operators. They also caution that the high prices and high volatility will make risk management even more important in 2026.
Weather Outlook: Transition Brings Risk
La Niña continues to weaken and is expected to dissipate by March, with a transitional phase most likely through spring and early summer.
“We’re watching a classic transition year unfold,” says Matt Makens atmospheric scientist. “Even as the ocean changes, the atmosphere typically takes four to eight weeks to respond, so weather impacts will lag.”
In the near term, drought risks remain elevated across the Southern U.S. and Central Plains, with a 70% chance of intensification, especially south of I-70 and west of I-35. Spring’s neutral setup may help moisture distribute more evenly, though lingering La Niña effects could still limit precipitation west of I-35.
Summer outcomes hinge on how quickly a potential El Niño develops. A fast forming El Niño could deepen drought in corn growing regions while increasing precipitation in the West, whereas slower development may support more balanced moisture. By fall, El Niño becomes increasingly likely, though global climate factors could still alter its typical impacts.
“El Niño isn’t a guarantee of rain for everyone,” Makens summarizes. “Other global patterns can amplify or mute its influence, so close monitoring remains essential.”
Despite near-term volatility, the long-term outlook remains positive. Strong domestic demand, improving beef quality, and sufficient packing capacity are expected to continue supporting profitability for the cow-calf sector as the industry moves into the next phase of the cattle cycle.
