NASHVILLE, TENN. (RFD NEWS) — The U.S. Department of Agriculture (USDA) is forecasting continued strength in cattle prices after lowering its beef production outlook and raising steer price projections through 2027.
In its July Livestock, Dairy and Poultry Outlook, USDA reduced its beef production forecast, citing fewer steer and heifer slaughter numbers this year as well as lower cattle placements that are expected to tighten supplies into next year.
World Agricultural Outlook Board Chair Mark Jekanowski said the supply situation continues to support higher prices.
“We raised our steer price forecast for 2026 by 94 cents per hundredweight. Now it is at $251.10 per hundredweight, and we expect that strength to continue into 2027, given the tight supplies,” Jekanowski said. “That price forecast was raised by 50 cents per hundredweight to $254.25.”
Despite near-record cattle prices, widespread drought is complicating efforts to rebuild the nation’s cow herd.
According to USDA, about 46 percent of the U.S. cattle inventory is currently located in drought-affected areas, up sharply from just 16 percent at the same time last year. While strong market prices encourage producers to retain heifers for breeding, limited pasture conditions and rising feed costs may instead force some operations to continue culling cattle.
Heat Stress Remains a Summer Concern
As hot weather persists across much of farm country, livestock specialists are reminding producers to take proactive steps to reduce heat stress in their herds.
A University of Nebraska livestock specialist said preparation should include multiple management practices rather than relying on a single solution.
“The plan here is to be ready with shades, to be ready with sprinklers, to be ready with bedding,” the specialist said. “It’s a very comprehensive approach, which in many cases we need to start thinking about this very early on.”
Experts also recommend maintaining good airflow and implementing effective fly control to help keep livestock healthy and productive during periods of extreme summer heat.
Feedlot Profits Fade as Cattle Costs Keep Rising
Kansas feedlots posted strong early-summer returns, but projected profits turn sharply negative as feeder cattle prices and feeding costs climb. Kansas State University economist Glynn Tonsor says current projections show a rapid shift from large June gains to losses later this year.
June steer closeouts are projected at a profit of $485.52 per head, while heifers are estimated at $277.88. July steer returns fall to $24.92, and heifer returns move to a loss of $107.83 per head.
Losses deepen through fall. Steer closeouts are projected at negative $323.52 in September and negative $344.76 in October. Heifer losses reach negative $312.52 in October as weaker fed-cattle prices collide with expensive placements.
The outlook assumes cash-market sales without price-risk management. Actual results will vary with feed efficiency, purchase prices, basis, performance, and individual marketing strategies.
Feeders will compare projected break-evens with their own costs before placing cattle. Risk management, disciplined bidding, and tighter performance control may become increasingly important as margins deteriorate.
