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

The trade war between the US and China continues, with US red meat exports to that country now virtually halted due to colossal tariffs.

As the US Meat Export Federation noted last week, pork and beef exports to China have since hit a wall due to China’s duties, which now total 172 percent for US pork and 147pc for US beef.

However, one wouldn’t know any of this was going on if you looked at the market for US grain-fed cattle. Cash live cattle prices set record high for two and likely three weeks in a row.

Fed beef processors continue to scramble to buy market-ready cattle as the grilling season begins. The Five-Area fed steer price the week ended May 3 averaged US$220.97 per cwt live, up US$4.65 per cwt from the prior week’s US$216.32 per cwt, which was the previous record.

The price was 19pc higher than the price the same week last year. This meant that prices rose by US $13.27 per cwt in three weeks.

Dressed prices the week ended May 3 last also averaged a new record high of US$349.37 per cwt, up US$7.95 per cwt from the prior week’s US $341.42 per cwt, which was the previous record.

It was up 18.6pc on the same week last year. This meant that prices rose by US $21.64 per cwt in three weeks. The trend of more record high prices looked set to continue last week as well, so the market continues to defy gravity. Calf and feeder cattle prices have also rebounded from earlier in the year to new highs as well.

The high prices, as Jon Condon has written often, are primarily due to the US cattle herd being the smallest since 1951. But strong beef demand at home and abroad is also under-pinning the market.

Despite a great deal of uncertainty, global demand for US beef remains robust and resilient, USMEF President and CEO Dan Halstrom said last week.

The March US export results confirmed this, with demand trending higher in Taiwan and Mexico, reaching record levels in Central America and holding up well in Japan and Korea, said Halstrom.

Although USMEF anticipates that China’s retaliatory tariffs and expired plant registrations will have a more drastic impact on April and May exports, the US industry’s efforts to diversify markets and broaden US beef’s global footprint are definitely paying dividends, he said.

March beef exports totaled 109,330t, up 1pc from a year ago, while export value reached US$922M, up 4pc and the highest since June, said USMEF. First quarter exports were slightly below last year’s pace at 310,368t but increased 2pc in value to US$2.53 billion.

Biggest Tyson losses in history

The record high live cattle prices however are creating a financial nightmare for US fed beef processors. Tyson Foods’ beef segment, the largest fed beef processor in the US, looks set to have easily its biggest annual loss in its history.

The segment had a US$258 million operating loss in Tyson’s fiscal 2025 second quarter. This meant a US$322 million loss for the six months ended March 29. The segment’s previous biggest annual loss was US$244 million in 2006.

Beef is experiencing the most challenging market condition that Tyson has ever seen, CEO Donnie King told analysts on May 5. Beef sales in the quarter were US$5.196 billion, versus US$4.954 billion a year earlier. Volume was down 1.4pc, primarily due to a lower number of cattle harvested than a year ago, partially offset by higher average carcase weights.

The operating loss went against a US$35 million loss a year earlier. This meant the operating margin was a negative 5pc versus a negative 0.7pc.

Operating income in beef decreased as beef margins remained compressed, partially offset by improved operational execution, said Tyson. Additionally, operating income for the second quarter and first six months of fiscal 2025 was impacted by the recognition of legal contingency accruals and network optimization plan charges. But beef sales increased primarily due to a higher average price per pound, reflecting ongoing healthy demand, it said.

Tyson in beef is navigating a challenging environment with discipline, King told analysts. It is managing costs and enhancing its mix for more value-added offerings. While limited cattle availability is pressuring spreads, consumer demand has remained resilient. Tyson’s teams are executing well across procurement, production and distribution to meet customer needs and stay on price, he said.

It is important to note that cattle on feed from a weight perspective are extremely heavy, Brady Stewart, Tyson’s Group President, Prepared Foods, Beef & Pork and Chief Supply Chain Officer told analysts. We’re at record weights throughout the business as well. The weights are offsetting from a volume perspective some of the lower head counts as the supply has been obviously lower than a year ago. Relative to heifer retention, if the industry is not at the bottom relative to cow inventories, Tyson can definitely see it from here as well, said Stewart.

No one however will shed a tear about packers’ financial woes, as they made billions of dollars before and during the COVID pandemic.

Tyson Beef in fiscal had operating income of US$10.232 billion in the five years from 2018 to 2022 inclusive. One can trust that it squirrelled much of that away. But the huge profits then a flood of red ink show what a fickle business beef 2018 to 2022 inclusive processing is.