Beef packers are really feeling the pinch right now as cattle prices hit record levels.
Last week, packers paid a record $244 per hundredweight for choice steers, but the value they got back actually dropped a bit. That pushed their losses to the highest we have seen since 1988, at over $300 per head.
At the same time, cattle feeders are cashing in by selling feeder steers at new record prices. Processing plants are running below capacity, and that could continue to impact the market dynamics for packers.
While packers face record losses, tight cattle supplies and strong demand are keeping beef prices high. Texas A&M experts say that low herd numbers and steady demand are driving calf prices to new highs.
Even with heavier cattle, overall production remains below normal. Many ranchers are selling heifers instead of rebuilding their herds. Prices are expected to rise into next year as producers focus on profitability and prepare for the future.
With cattle prices high, a big question is when producers will start retaining heifers and rebuilding the herd.
The data shows the percentage of heifers being slaughtered is actually rising this year. That suggests many producers are still choosing to sell rather than hold heifers.
Oklahoma State Livestock Marketing Specialist, Derrell Peel explains what this means for the industry:
“We keep looking at this heifer question from both sides. The mid-year cattle inventory report suggested that we were not retaining any heifers yet, and if you look at slaughter: heifer slaugther as a percentage of cattle slaughter is going up, actually. So this chart actually has quite a bit of historical context to it. So for 2025, it appears that we’re on track to see the heifer slaughter percentage actually increase. Heifer slaughter was down in the first six months of the year, a little over 4%, but total cattle slaughter was down even more. So heifers as a percentage of the total is still going up.”
Peel says that many producers do not have enough cattle to use all the forage.
The choice between selling now for quick profit or investing in growing the herd is still a tough decision for many producers.
