NASHVILLE, TENN. (RFD NEWS) — Despite rising costs and increasing food insecurity — data shows Americans kept meat on the menu throughout 2025 — but as we kick off the new year, there are signs that consumer spending could reshape demand.
Kansas State University ag economist Dr. Glynn Tonsor says that as of December, 17 percent of Americans reported their finances are better than a year ago. But more than a third said their financial situation is getting worse, according to the K-State Monthly Meat Demand Monitor (MDM).
“That is not good, and to drive it home for meat, one of the things we capture is, what did you do yesterday? At home, away from home, skip breakfast, lunch, and dinner? Total that up.” Dr. Tonsor says. “Think of it this way: you could have had pork in three meals. You could have had beef in three meals, and so forth. I kind of know that for everybody in the MDM, and you’re way more likely to have had any of the major proteins, beef, pork, chicken — and, actually, fish and seafood attract some here — if you tell me your finances are better.”
Tonsor says that while some Americans are tightening their wallets, these challenges are nothing new for the meat industry. He refers to the “K-Shape” economy, which we hear Scott the Cow Guy talk about regularly on Cow Guy Close.
“If you’re out there listening, and you’re a cattle producer or hog producer, whatever it might be, this actually does matter to your bottom line, because those are on the bottom side of that K when you carry the K-Shape,” he explained. “They’re going to restaurants less, and they’re tightening their wallet, probably rationally, because they’re concerned about the future of their finances. And that is a headwind as we enter 2026, but I got a highlight that it’s not a new headwind. It was there through a good chunk of 2025, and in many ways, the up part of the K, like the part that folks who are doing better and willing to spend, has offset it in aggregate, right? So, we had strong beef demand in particular in 2025, but it was carried by the top part of that K to more than offset the lower part of that K. There’s nothing wrong with that. I’m not trying to make a political statement. We’re in a large country, but it’s important to understand those distinctions, and the MDM helps us do that.”
Tonsor urges producers to pay attention. He says the demand split shows that while some households are scaling back, others continue to drive strong sales, keeping overall consumption high. We’ll continue to monitor how the financial outlook shapes these trends, including this Friday’s Cattle-on-Feed report.
Key USDA Cattle Reports Signal Herd Direction
Two closely watched U.S. Department of Agriculture (USDA) cattle reports later this month will offer critical signals on feedlot supplies and whether the long-anticipated herd rebuilding phase is beginning, according to Dr. David Anderson, livestock economist with Texas A&M AgriLife Extension.
The January Cattle on Feed report, due January 23, is expected to show December marketings about 2 percent higher than a year earlier, reflecting one additional slaughter day. Even so, daily average marketings likely trailed last year due to fewer cattle available. Placements are projected roughly 5 percent lower year over year, driven largely by the continued absence of feeder cattle imports from Mexico. With higher marketings and lower placements, total cattle on feed as of January 1 are expected to be down more than 2 percent.
Attention will center on the share of heifers on feed, a key indicator of whether producers are retaining females for future herd growth.
The next Cattle inventory report, due on January 30, should clarify whether the cattle cycle has bottomed. Beef cow numbers are expected to be roughly unchanged from a year ago, as sharply lower cow slaughter in 2025 offset limited heifer retention. Anderson notes evidence of meaningful herd expansion remains thin, despite record-high calf prices.
USDA Sees Livestock Output Firming Despite Price Pressures
U.S. livestock production is expected to remain resilient in 2026, with stronger weights, productivity gains, and steady demand offsetting tighter animal supplies across several sectors. USDA’s January Livestock, Dairy, and Poultry Outlook (PDF Version) shows modest upward revisions to beef and dairy production forecasts, while pork and poultry output continue to expand.
Beef production for 2026 is now forecast at 25.7 billion pounds, slightly higher than last month, as heavier carcass weights more than offset fewer fed cattle marketings. Cattle price projections were also raised on recent strength, though beef imports are expected to increase amid ample global supplies and firm U.S. demand. Beef exports were trimmed due to rising competition in Asia.
Dairy production is projected to rise to 234.3 billion pounds in 2026, driven by higher milk per cow. Milk-fat exports are expected to reach record highs, while protein markets remain strong. However, the 2026 all-milk price forecast was lowered to $18.25 per hundredweight.
Pork production is projected to increase by 2.3 percent in 2026, with hog prices averaging near $67 per hundredweight.
Poultry output was revised higher, while egg production and prices were adjusted lower on smaller layer inventories.
With the potential for increased beef imports, the debate over mandatory country-of-origin labeling (MCOOL) has reignited. Mike Stranz with the National Farmers Union says he can confirm this legislation is back on the table in Washington.
“It’s been encouraging to see the support materializing and building for the bills that would bring back country-of-origin labeling for beef … in the House and the Senate,” Stranz says. “And we’re really glad to see the work from Congresswoman Harriet Hageman from Wyoming, who’s been the champion in recent months and years on the country-of-origin labeling efforts in the House. So, we want to see that built, and I think if there’s going to be talk about further increasing beef imports, we need to have country-of-origin labeling. And I think that’s clear to many members of Congress.”
Stranz says another item at the top of his to-do list is addressing market competition. He says there are promising signs from the Department of Justice regarding investigations into alleged market manipulation in the beef sector, as well as from the Federal Trade Commission regarding “right to repair” issues.
