October 20

10/20 – Last week the President said that his administration had “worked our magic” and struck a deal to bring down beef prices. We can only hope that this involves tariff reductions and/or quota increases on imported beef, particularly 90s lean beef trimmings from Brazil that are currently subject to a 76% levy. As far as the U.S. cattle supply is concerned, it’s at a record low and not getting better soon. Consider that once a rancher has made the decision to retain heifers and finance expansion, it’s 9½ months for gestation and another 18-22 months to grow a cow to slaughter weight. That’s a 2½+ year cycle, which puts us well into 2028 if it started now. In Sept’s WASDE (there was no Oct report), the USDA projected a 4.3% drop in beef production in 2025, followed by an additional 1.3% decline in 2026. Cattle futures hit a new record high of $243.95/cwt last week (Thurs) before closing at $240.25 on Friday (10/17) – 28.7% above a year ago.