NASHVILLE, Tenn. (RFD-TV) — Cattle markets are entering 2026 with tightening fed cattle supplies and rising volatility, even as beef demand remains resilient. Reduced feedlot placements, no meaningful beef cow herd expansion, and the start of slaughter capacity reductions are reshaping price expectations across the cattle complex.
Analysis from Dave Weaber at Terrain indicates fed cattle supplies in the first quarter of 2026 are expected to run 6 to 7 percent below year-ago levels. Recent plant closures and shift reductions in Nebraska and Texas are projected to trim U.S. slaughter capacity by roughly 6.6 percent — improving operational efficiency but slightly shifting leverage toward packers. Even so, the remaining plants are expected to compete more aggressively for available cattle.
The Lexington plant is set to close in just days, and we are now seeing the impact of that loss on the communities there. Researchers at the University of Nebraska-Lincoln say this is the first time one of the “Big Four” meatpackers has closed a significant packing facility. They estimate the shuttering will cost the state $3.2 billion in economic activity and could result in substantial labor losses. When you factor in the 7,000 jobs supporting that sector, they’re looking at a nearly $550 million annual hit. Researchers also estimate that Nebraska sales taxes will decline by $ 10 million per year as a result.
Despite market uncertainty, prices are projected to rebound in the spring. Choice beef cutout values are expected to average $375 to $385 per hundredweight in the first quarter, with fed cattle prices averaging $234 to $238. Feeder and calf prices have already recovered much of their fall decline, supported by strong demand for lighter cattle and steady consumer beef spending.
The most significant downside risk remains changes to the U.S.–Mexico border status, which could quickly pressure feeder cattle markets.
