The Producer Price Index (PPI) measures inflation before it’s passed down to the consumer. This morning’s number shows that it remained unchanged in June. The markets were preparing for a slightly higher reading.
Year-over-year, it’s up 2.3 percent, also lower than previously expected. This comes after yesterday’s Consumer Price Index (CPI), which was on target, indicating that inflation may finally be showing signs of cooling.
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Shrinking slaughter capacity may delay heifer retention, complicating herd rebuilding plans.
Even small declines in the calf crop translate into sustained supply pressure, supporting cattle prices over multiple years.
Economists are also closely watching how policy decisions in Washington could influence markets moving forward. Analysts say deferred futures for corn, soybeans, and wheat suggest markets are operating near break-even levels, not at prices that would encourage expanded production.
Falling livestock prices, combined with higher input costs, continue to squeeze farm profitability heading into 2026.
Smaller cow numbers and a declining calf crop point to prolonged tight cattle supplies, limiting near-term herd rebuilding potential.
Strong rail demand and higher fuel costs raise transportation risk even as barge and export flows stabilize.
The federal government’s status is far from the only factor moving the markets on Friday. Two critical reports released today on producer inflation and the status of the U.S. cattle herd are also top of mind.
