Market Trends in Beef: Preparing for 2025

Patrick Linnell, CattleFax

The cattle cycle continues to point towards tighter inventory numbers and beef production ahead, despite a cyclical pause with supplies virtually steady in 2024. While the industry may be approaching a low in cow inventories, the smaller calf crop in 2024 and likely 2025 will continue to work through the supply chain. As a result, fed slaughter numbers and beef production are expected to decline in the next few years. ¹

Cow slaughter saw a dramatic reduction in 2024 but was not small enough to facilitate herd rebuilding due to the record-small replacement heifer inventories to begin the year. ¹ Beef cow inventories are likely to be slightly lower to begin 2025. However, there are indications of a modest increase in heifer retention to close out 2024 as stout cow-calf margins are sending a strong signal to expand. This is expected to pave the way for a slow expansion pace to unfold in the year ahead. 

The U.S. calf crop was down an estimated 600,000 head in 2024, with a smaller decline expected in 2025, possibly marking the cycle low. While expansion and heifer retention are not expected to mirror the explosive pace of the last cycle, increased heifer retention will translate to a tightening of feedyard placements and fed slaughter numbers. Fed cattle slaughter is forecast to decline by around 700,000 head in 2025. 

Meanwhile, beef cow and dairy cow slaughter numbers will remain tight, forecast to be slightly lower for the year. Consequently, lean trim and grind supplies may be limited and lean beef prices are likely to set new records once again. Strong lean values will also draw a large tonnage of imported beef products from abroad, especially from Australia and Brazil. End meats within the fed cattle complex will also be supported by the reduced lean non-fed supplies as a result of grinding demand for some sub-primal items. 

Carcass weights were pressed to record levels in 2024 due to the combination of cheap grain prices, strong cattle values, and feeding performance. ¹, ⁵ The additional 26 pounds of carcass weight represented the equivalent of over a million head in additional cattle slaughter. As the driving factors remain in place, weights are likely to continue trending higher, albeit at a slower pace in 2025.

The factors that buffered beef supplies are unlikely to offset the cyclical tightening supply trend in 2025. U.S. beef production is expected to decline by nearly 600 million pounds or 2.1 percent for the year. Beef prices will be supported as the market is forced to ration the reduced supply. Exactly how high prices will reach will be contingent on demand. 

The fact that beef and cattle prices across all classes marked new records in 2024, despite steady to larger supplies, is a testament to the strength of demand for U.S. beef. ² The economy has, to this point, avoided a recession and the consumer has continued to favor beef despite inflationary challenges. Much of the strength in beef demand can also be attributed to quality of today’s U.S. beef production. 

While uncertainty around the economy remains elevated, multiple signs suggest reason for cautious optimism into 2025. From a global standpoint, geopolitical risks will also need monitored as potential trade barriers and tariffs imposed by and on the U.S. could have implications to beef markets.  

In short, reduced beef production and continued strength in demand are expected to be the major factors underlying U.S. beef markets in 2025. ¹ Prices across the beef complex are expected to average into new highs as many seasonal supply and demand factors also remain at play. Price volatility is also likely to remain high as the market balances outside factors and uncertainty against tight supplies and already-record price levels.