42 NEBRASKA CATTLEMAN December 2025 recorded. All expectations are that retail beef prices will moderate given softening demand. I expect consumers to purchase less beef at similar prices experienced in 2025, causing beef demand to soften slightly and lessen the need for as much beef production. I attribute this weakening primarily to consumer uncertainty about the economy, borrowing interest rates and rising credit card default rates. INTERNATIONAL TRADE Under the Trump administration in 2025, tariffs played an important role in beef trade. Current beef exports to China are now back to pre-Phase 1 and Phase 2 levels, shifting China from a major buyer to a minor market. Fortunately, new export markets continue to emerge, supported by the Beef Checkoff Program. Toward the end of the year, most discussion has shifted to South American countries such as Argentina and Brazil that currently have an excess of beef on their markets. While each country advocates for market access, particularly through the tariff-rate quota system (the United States advocated for an increase in the European Union), the long-term effects from resource allocation will be important to watch. The United States has long been a premium, grainfeed beef supplier to the international market. With Brazil ramping up their corn and ethanol production, excess feed could be put through cattle to make a premium beef product that would directly compete with the United States in the international market. Non-tariff measures such as sanitary and phytosanitary regulations (SPS) are also a key figure in the Trump trade negotiations. The United States maintains some of the most lenient import standards among major trading nations, forcing domestic producers to meet stricter health requirements abroad than foreign suppliers face when exporting here. These issues will remain central to the ongoing trade negotiations. FED CATTLE Carcass weights have continued to be elevated, driven by low corn prices, higher feeder cattle prices and low discounts for heavy carcasses. All these indicate that feedlot profits should be maximized by putting additional pounds on an existing carcass rather than putting weight on a new animal. I expect the number of days on feed to continue to stay elevated, leading to more cattle grading Choice+ but at higher yield grades (4s and 5s) and thus more residual fat to be utilized. I do not anticipate any change to the discounts on heavy carcass cattle as these discounts have remained constant over the last four years. For carcass weights to change, grid discounts would need to increase and corn would have to get more expensive as feeder cattle prices will certainly be higher in the future. FEEDER CATTLE Feeder cattle prices kept the ball rolling in 2025. Even so, heifer retention appeared at times to be lagging. Heifer retention first shows up through a reduction in the share of auction barn receipts for heifers. Toward the end of the year, prices at some regional markets started to slip. However, the full picture on price won’t be known until the USDA January Cattle Inventory Report. I will be watching the beef cows and heifers that have calved and heifers that were retained for breeding. While the national number is important, state-level reporting is the most important as it points to potential regional price dynamics that could play out in 2026. Fewer beef cows and more heifers retained for breeding imply higher prices for steer calves throughout the year and changes to the steer-heifer price spread. I expect higher prices that will moderate throughout the year due to on-going supply dynamics. CONCLUSION 2026 will be a volatile price year as we begin a transition in herd dynamics amidst potential changes in consumer demand and international trade. It will be a year full of optimism in the feeder cattle market, trade-offs of heavier weights under fewer animals between feedlots and packers, and how resilient consumers will remain at higher beef prices. ~NC~ 100 102 112 107 117 116 108108 102 97 93 94 98 99 104 112 109 106107 110 116 124 122 116 122 134 0 20 40 60 80 100 120 140 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 Index Value Figure 1. Retail All Fresh Beef Demand Index in the Second Quarter, Using CPI 2000=100. Data Source: Bureau of Labor Statistics, USDA-ERS, Compiled & Analysis by LMIC MARKETS CONTINUED FROM PAGE 40
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