The fourth quarter of 2026 is shaping up to be a volatile period for the cattle and beef markets, caught in the crosshairs of lingering drought, fluctuating slaughter capacity and political intervention.
According to Dave Weaber, Terrain’s senior research analyst for animal protein, cattle markets are facing a “bumpy quarter ahead” after losing their footing over the summer. Major headwinds and shifting dynamics are confronting producers, feeders and the futures market.
Drought and Carrying Costs Impede Herd Rebuilding
“2026 has been a remarkably dry year for much of the central Plains and west,” Weaber explains in his Q4 cattle and beef outlook.
By summer’s end, he says, more than 80% of the U.S. cattle inventory was in areas experiencing abnormally dry or worse conditions. Hay prices in the central and northern Plains had risen by $150 to $200 per ton in roughly 60 days, adding to ranchers’ carrying costs.
Those conditions are making herd expansion harder to justify.
“Add to this the replay of political intervention in the beef market via imports, and cow-calf producers are even less incentivized to rebuild cow herd numbers,” Weaber says.
Slaughter Capacity Shifts and Feeder Bargaining Power
On the processing side, recent plant closures and reopenings are altering the balance of power. Tyson closed its plant in Joslin, Ill., in mid-August, added back a second shift in Amarillo, Texas, and sought a buyer for its Pasco, Wash., facility. Meanwhile, Cargill ratified a labor contract and restarted its Fort Morgan, Colo., plant in mid-September.
While Terrain calculates net-fed slaughter capacity is up from its summer lows, it remains down 7,800 head per day compared to last year. However, Weaber notes that “the addition of this slaughter capacity will spread existing fed cattle supplies across more plants and erode packers’ bargaining position,” leading him to “expect cattle feeders to hold more of the bargaining power as Q4 begins.”
Weighing the Impact of Import Headlines
Recent trade developments — including the reopening of border crossings in Douglas, Ariz., and Santa Teresa, N.M., for Mexican cattle imports — have made headlines, but Weaber views the initial border reopenings more as “a media event than a market mover” due to logistical and equipment hurdles.
A presidential executive order in August suspended duties on certain over-quota beef imports for 90 days. The order covered up to 300,000 metric tons of beef trimmings and grinding material, with 100,000 metric tons allowed per month. But Weaber says the full volume is unlikely to arrive: Industry participants expect about 150,000 metric tons to flow under the plan, and roughly 100,000 metric tons of that was already destined for the U.S.
“Not all the beef imported under the plan will be new volume,” Weaber explains, citing limited product availability and shipping constraints. “The impact on beef availability and consumer prices will be considerably less than the headlines suggest.”
Weaber expects the imports to increase domestic ground-beef availability by 2% to 3%, or about 0.1 lb. to 0.15 lb. per person per month. Weaber calculates that increase equals roughly one McDonald’s hamburger per person per month, noting the maximum allowed import volume would have added only about two quarter-pounders.
That increase could still weigh on prices. Weaber says the added supplies point to a $15 cwt. to $20 cwt. decline in the boxed-beef cutout and a $9 cwt. to $12 cwt.decline in fed-cattle prices for late Q3 and early Q4, compared with a year earlier.
Q4 Price Forecasts and Financial Outlook
Despite the turbulence, prices are finding some footing. Choice boxed beef cutout values have stabilized in the $375 cwt. to $380 cwt. area. Ribeyes and strip loins have been trading at record levels since early August, while tenderloins were near year-earlier levels.
Weaber’s key Q4 expectations include:
- Fed Cattle: Five-area live steers are projected to average $230 to $235 cwt. in Q4. This translates to “slight losses to near break-even unhedged returns during Q4 2026,” following unhedged losses of $200 to $250 per head in Q3.
- Feeder Cattle: Feeder prices are expected to trade sideways, averaging $350 to $370 cwt. for Q4 2026. Oklahoma City steer calves (450-lb.) are expected to average $465 to $480 cwt. across Q3 and Q4.
“My price forecasts are substantially below previous expectations and close to year-ago levels,” Weaber summarizes. “Without long futures commodity hedge fund support, retesting early-summer live and feeder cattle futures highs will be a long, slow process fraught with challenges and risk tied to every news headline.”
