LUBBOCK, TEXAS (RFD NEWS) — Strong calf prices are not yet enough to trigger herd rebuilding as drought and rising input costs continue to limit expansion decisions. Analysis from Hannah Baker, University of Florida Extension beef economist, highlights growing pressure on cow-calf producers across the Southeast.
Drought remains a major constraint, with all of the Southeast experiencing some level of dryness and about 75 percent in severe to extreme conditions. Stressed forage, combined with early-year freezes, has reduced grazing availability and increased reliance on purchased feed.
Farm-Level Takeaway: High prices alone may not drive herd expansion.
Tony St. James, RFD News Markets Specialist
Input costs are adding further pressure. Diesel prices are running roughly 55 percent above a year ago, with some areas topping $6 per gallon. Fertilizer prices have also jumped, with potash, UAN, and urea all posting significant year-over-year increases, raising concerns about forage quality and production.
Despite those challenges, cattle prices remain historically strong. Steer calves in the Southern Plains are up sharply from both last year and the five-year average, supported by tight supplies and strong demand.
Rabobank’s outlook signals a tightening margin environment, emphasizing the need for cost control, trade stability, and clearer policy signals heading into 2026.
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