US Cattle Prices Expected to Decline as Drought and Costs Reshape Market

Cattle prices in the US are expected to decline over the next two years due to several factors, including drought and rising costs. According to CattleFax, a leading provider of cattle market information, the US cattle market has moved beyond its cyclical price highs, with calf and fed cattle values expected to weaken through 2027.

The main obstacle to expansion is grass, as about 72% of the US beef cow herd was in drought-affected areas during August. This has reduced forage availability and encouraged some ranchers to cull cows or wean calves earlier, complicating the retention of heifers needed to begin rebuilding the national herd.

The situation is further complicated by high feed and input costs, which have increased transportation costs and narrowed profit margins for producers. The average all-hay prices reached $184 per ton in July, while corn futures were trading around $5.25 to $5.45 per bushel.

CattleFax expects a slow rebuilding of the US herd, with beef cow numbers expected to rise by only about 300,000 head in 2027. This limited supply growth could keep producer margins profitable despite softer cattle prices.