On Thursday, the popular CattleFax Outlook Seminar, held as part of CattleCon 2026 in Nashville, Tennessee, shared expert market and weather analysis.
“The U.S. cattle and beef industry enters 2026 with strong but volatile market conditions, as historically tight cattle supplies, record-setting beef demand, and elevated policy and weather uncertainty continue to support prices, even as markets appear to near cyclical highs. Tight inventories and exceptional demand remain the dominant forces shaping the market; however, producer demographics, high input costs, and policy uncertainty point to a slow and measured expansion phase,” said Mike Murphy, CattleFax chief operating officer.
La Niña continues to weaken and is expected to dissipate by March, with a transitional phase most likely through spring and early summer. “We’re watching a classic transition year unfold,” said Matt Makens atmospheric scientist. “Even as the ocean changes, the atmosphere typically takes four to eight weeks to respond, so weather impacts will lag.”
In the near term, drought risks remain elevated across the Southern U.S. and Central Plains, with a 70% chance of intensification, especially south of I-70 and west of I-35. Spring’s neutral setup may help moisture distribute more evenly, though lingering La Niña effects could still limit precipitation west of I-35.
Summer outcomes hinge on how quickly a potential El Niño develops. A fast forming El Niño could deepen drought in corn growing regions while increasing precipitation in the West, whereas slower development may support more balanced moisture. By fall, El Niño becomes increasingly likely, though global climate factors could still alter its typical impacts. “El Niño isn’t a guarantee of rain for everyone,” Makens said. “Other global patterns can amplify or mute its influence, so close monitoring remains essential.”
Shifting the discussion to an outlook on the economy, energy and feed grains, Troy Bockelmann, CattleFax director of protein and grain analysis, noted that inflation continued to moderate in 2025, ending the year at 2.7% CPI growth and spending most of the year below 3%, the lowest since 2020-2021. With inflation relatively low, the U.S. Federal Reserve lowered interest rates in 2025, finishing the year with the Prime Rate just below 7%, which is still relatively high relative to the 3% level seen from 2009 to 2021.
“After several years of navigating economic turbulence, the U.S. is finally entering 2026 with a macro-economic foundation that feels steady and more predictable,” said Troy Bockelmann. “Moderating inflation, improving monetary policy, and strong consumer spending are reinforcing the sense of stability across the industries we serve.”
U.S. corn production reached a record 186.5 bu/acre in 2025, driving total output to 17 billion bushels from 98.8 million planted acres. Competitive prices and ample supply are expected to boost exports in 2026. With a 13.6% stocks‑to‑use ratio, corn prices should stay in the $4-$5/bu range.
CattleFax shared that U.S. hay production increased slightly in 2025 to about 123 million tons. Hay prices are expected to average around $145/ton in 2026. On the energy front, Bockelmann said that energy supply should remain adequate, keeping prices low and rangebound for diesel, natural gas and oil. When taking a look at competing proteins, pork and poultry markets are expected to see modest growth in 2026.
Kevin Good, vice president of market analysis at CattleFax, reported the U.S. beef cow herd decreased 280,000, while dairy cow inventories increased by 190,000 head.
Cattle availability will remain constrained in the first half of 2026 due to limited feeder cattle supplies. Fed slaughter is projected to decline by 600,000 head, primarily early in the year, and non-fed slaughter is expected to remain historically tight at 5.6 million head. Total commercial beef production is projected to decline again in 2026, albeit at a slower pace than in 2025. With imports up 5% and exports down 5%, U.S. per-capita beef supplies are forecast 0.2 lbs. larger in 2026 to 59.2 lbs., the largest since 2010.
Retail beef demand remained historically strong in 2025, with record retail prices supported by steady consumption and exceptional product quality. Consumer preferences continue to favor high-protein, nutrient-dense foods, reinforcing demand even as higher prices move through the supply chain.
“With 84% of fed cattle grading Choice or higher and 12% grading Prime, the industry is well positioned to sustain premium pricing,” Good noted. “Beef demand continues to be anchored by exceptional quality and strong consumer confidence in beef as a premium protein. Even as markets adjust and trade flows shift, the fundamentals supporting long-term beef demand remain solid.”
