By Emmy Powell
Communications Specialist

Cattle prices have declined from recent highs, but tight supplies and strong beef demand continue to support the market.

Calf prices have dropped about $100 per hundredweight over the past six to eight weeks, according to Texas A&M AgriLife Extension Economist Dr. David Anderson.

Fed cattle and cow prices have also declined.

“It’s been a dramatic decline, not only for fed cattle and calves, but the cow market is declining, too. There’s a bunch of reasons for that,” Anderson said.

Higher corn prices are one factor putting pressure on calf prices.

“There’s a number of other things that have an impact, like particularly rising corn prices,” Anderson said. “Corn prices are up dramatically in the last six to eight weeks. When corn prices go up, calf prices go down. So, a big part of that decline in the calf market is simply higher corn prices.”

Drought is also limiting the cattle industry’s ability to rebuild the U.S. herd. Cattle prices reached record levels earlier this year as supplies remained tight. Those higher prices typically encourage ranchers to expand their herds, but drought conditions across major cattle-producing regions are making expansion difficult.

“If you look across the country where we have severe drought, it’s where we produce a lot of cattle,” Anderson said. “We’ve had high prices, which are the signal for ranchers to expand their herds and increase production. But they cannot do that if you have drought, which becomes a limiting factor in increasing beef production.”

In August, the U.S. Department of Agriculture opened the Douglas, Arizona port to imports of Mexican cattle after the border had been closed due to concerns over New World screwworm.

But Anderson said the additional cattle are unlikely to have an immediate effect on beef supplies or cattle prices.

“Traditionally, cattle from Mexico are lighter weight feeder cattle, steers and spayed heifers that go either to ranches in the U.S. to graze over the winter or go straight to a feedlot,” he said.

Those lighter-weight cattle could remain in the production system for six to eight months before they are processed, pushing much of the potential market impact into 2027. Despite the recent decline in prices, Anderson noted several factors continue to support higher than average prices.

“I think we have plenty of reason to continue to expect some pretty good cattle prices,” Anderson said. “We’re not expanding our herds, so we’re not growing domestic production to add more beef that would then push down prices. We’re also not adding more cattle to go into feedlots, to go through packing plants that would result in lower cattle prices, as well.”

The recent price swings also highlight the importance of managing market risk.

Anderson said Livestock Risk Protection (LRP) can help ranchers protect against declining market prices. The insurance program allows ranchers to insure between 70% and 100% of the expected ending value of their cattle.

Learn more about LRP here.