LUBBOCK, TX – Cattle producers face a more volatile fourth quarter as drought, shifting slaughter capacity, Mexican feeder cattle imports and added beef imports reshape market expectations, according to Terrain analyst Dave Weaber.
More than 80% of the U.S. cattle inventory ended summer in areas rated abnormally dry or worse. Terrain says hay prices across the Central and Northern Plains rose $150 to $200 per ton, increasing ranch carrying costs and discouraging heifer retention.
Fed slaughter capacity has improved from summer lows but remains 7,800 head per day below a year ago. Reopened Mexican border crossings are also restoring feeder cattle flows, including Santa Teresa, New Mexico, which could eventually handle 7,500 to 8,000 head weekly.
Terrain expects temporary tariff relief on over-quota beef imports to increase ground beef availability modestly, with industry participants expecting about 150,000 metric tons of additional flow rather than the full authorized amount.
Weaber now projects five-area live steers around $230 to $235 per hundredweight in both the third and fourth quarters, with unhedged cattle near break-even or facing losses.
Farm-Level Takeaway: Drought costs, returning Mexican cattle flows and added beef imports could keep cattle prices volatile and producer margins under pressure through year-end.