A monthly column written for Beef Central by US beef and livestock markets commentator Steve Kay, publisher of US Cattle Buyers Weekly

IN my weekly coverage of the United States meat and livestock industry, I regularly report on the key supply and demand factors that face the North American beef industry.

As we start the second half of the year, I thought it would be of value to outline the latest fundamentals.

First and foremost, it is important to remind ourselves that the US cattle population is the smallest since 1951. The January 1 2025 national herd total of 86.662 million head was down another 0.6 percent from 87.175m the previous year. But the big difference between 1951 and 2024 is that 1951 produced 8.1 billion pounds of beef, versus 27 billion pounds last year.

Last year, 2024, was the sixth year of US herd liquidation, with a decline of more than 8 million head. But the Cattle on Feed total has this year remained close to last year, each month.

The June 1 total was 11.442 million head, was 98.8pc of a year earlier. Slower-than-estimated feedlot marketings will keep the front-end supply above a year ago into December.

Feedlots are holding cattle longer, hence record high carcase weights for this time of year. That’s the main reason why weekly slaughter rates have been mostly below 600,000 head this year.

Only three weeks out of the past 25 have been above 600,000 head. US packers are operating their plants only five days per week.

With live cattle in strong hands, fed cattle prices put in new record highs on a live basis for nine weeks in a row until the week ended June 20. The 5-area steer price that week averaged US$238.91 per cwt, up US$2.29 per cwt from the prior week’s record.

This was up 24pc from the same week last year and was up US$31.21 per cwt in nine weeks. Dressed prices averaged US$380.06 per cwt, down US28c per cwt from the record US$380.34 per cwt of the prior week. But the price was up 24.4pc from the same week last year.

New World screwworm impact

New World screwworm impact in May looked like having a significant impact on feeder cattle supplies from Mexico.

A new ban imposed on May 11 on the importation of Mexican cattle was forecast to boost US live cattle prices in the summer when they normally decline. The new ban began after reports that the disease was spreading north from southern Mexico.

Well over one million Mexican feeder cattle entered the US in 2024, with most going to Southern Plains feedlots. However US Agriculture Secretary Brooke Rollins on July 1 announced that cattle, bison and horses from Mexico will once again be eligible to enter the US through a phased reopening of risk-based ports beginning as early as Monday this week (July 7).

The downturn in the herd size has been due to lingering drought, high input costs (including the cost of borrowing to finance heifer retention), the increasing age of cattle ranchers and their increased aversion to risk. Some modest beef herd rebuilding might show up this year because of record high live cattle and feeder cattle prices. But ranchers will remain wary of expanding too quickly and will need to see ample green grass.

Demand remains strong

Strong demand at home and abroad for US beef is the main story so far this year. The domestic US market takes 87pc of all US beef production. Retail beef prices were record high in April. USDA Choice grade beef averaged US$8.83 per pound, up 8.3pc on last year.

The All Fresh beef price averaged US$8.50 per pound, up 6.9pc. Both prices eased slightly in May. Meanwhile, US beef exports January through April were 3pc below last year’s pace at 411,027t. But export value was down just 1pc to US$3.35 billion. This meant improved demand in value terms in overseas markets.

China impact

US beef still faces a 32pc tariff in China. But the bigger impediment is that China still has not renewed the certification for hundreds of US beef facilities, which expired in mid-March.

This means the vast majority of US beef is ineligible to ship to China, which has been the case for at least two months. The US Meat Export Federation estimates that the beef industry could experience a US$4.13 billion full-year impact if access to China is lost. But there has been no impact so far on US cattle producers or beef demand.

Packers say they are finding new homes for beef that would have gone to China. For example, more short-plates are now going to South Korea.

Meanwhile, the US Meat Export Federation continues to diversify and grow markets for US beef, from Central and South America to Asian nations such as Vietnam and the Philippines. Brazil and Australia are the only major beef-producing countries where herd size and production is growing.

Regarding domestic US beef consumption, the figure averaged 59.1 pounds per person in 2024 and will average 59.2 pounds per person in 2025.

It won’t increase above these levels unless US beef production and beef imports both increase significantly.

More cattle on feed might help per capita consumption increase but the key would be a lot more imported beef going into the hamburger trade.