NASHVILLE, TN – Cattle markets are entering 2026 with tightening fed cattle supplies and rising volatility, even as beef demand remains resilient. Reduced feedlot placements, no meaningful beef cow herd expansion, and the start of slaughter capacity reductions are reshaping price expectations across the cattle complex.
Analysis from Dave Weaber at Terrain indicates fed cattle supplies in the first quarter of 2026 are expected to run 6 to 7 percent below year-ago levels. Recent plant closures and shift reductions in Nebraska and Texas are projected to trim U.S. slaughter capacity by roughly 6.6 percent — improving operational efficiency but slightly shifting leverage toward packers. Even so, remaining plants are expected to compete more aggressively for available cattle.
Despite market uncertainty, prices are projected to rebound into spring. Choice beef cutout values are expected to average $375 to $385 per hundredweight in the first quarter, with fed cattle prices averaging $234 to $238. Feeder and calf prices have already recovered much of their fall decline, supported by strong demand for lighter cattle and steady consumer beef spending.
The largest downside risk remains changes to U.S.–Mexico border status, which could quickly pressure feeder cattle markets.
Farm-Level Takeaway: Preserving equity through active risk management remains critical in a volatile, supply-driven market.