Total beef production outlook for 2025 is projected up 120 million pounds from last month’s forecast to 26.685 billion pounds. This is the result of heavier expected carcass weights in each quarter more than offsetting lower-than-expected overall cattle slaughter since last month. Specifically, first-quarter beef production is lowered by 65 million pounds from last month on a slower pace of fed cattle and cow slaughter than previously anticipated, which is only partially offset by heavier expected carcass weights. In the second quarter, the forecast for beef production is increased 25 million pounds from last month as heavier carcass weights are carried forward, more than offsetting a slower pace of fed cattle marketings. In the third and fourth quarters, production is forecast up 70 and 90 million pounds, respectively, from last month as heavier carcass weights and an increase in fed cattle slaughter are expected.
This outlook is about 1% below levels in 2024 and 6% below the record set in 2022. A factor supporting production, however, is increasing average carcass weights despite fewer slaughtered cattle year over year. In the first eight weeks of 2025, weekly carcass weights have averaged 40 pounds more than the same period last year. This component of production is driven by two factors: heavier carcass weights of steers and heifers, and the proportion of steers and heifers in the slaughter mix among cows and bulls.
The latest Cattle on Feed report, published by the USDA National Agricultural Statistics Service (NASS), showed a Feb. 1 feedlot inventory of 11.716 million head, 1% below the 11.797 million head in the same month last year. Feedlot net placements in January were 3% higher year over year at 1.762 million head. Marketings in January were 1.869 million head, 1% above last year. On Feb. 1, the number of cattle on feed over 150 days was down almost 3% from year-ago levels. However, based on weekly slaughter through February, a slower pace of fed cattle slaughter will likely grow market-ready supplies in feedlots.
This increase of market-ready supplies of fed cattle is likely supported in part by feedlots continuing to increase poundage per animal and packers reducing slaughter schedules in February. This improves operational efficiencies on a per head basis, as packer margins are under pressure from paying much higher prices for fed cattle. As those measures are keeping cattle in feedlots beyond 200 days, fed cattle are being processed at heavier weights than a year ago, partially offsetting lower expected slaughter numbers this year.
The second component of higher average carcass weights is the number of steers and heifers in the slaughter mix, which have contributed about 79% of the total cattle slaughter annually over the last 10 years. Despite bulls averaging the second-heaviest carcass weight behind steers, they typically make up less than 2% of the slaughter mix. Through the first 10 weeks of this year, estimated weekly federally inspected slaughter points to fed cattle averaging over 81% of total federally inspected cattle slaughter, the first time it has moved above 80% this early in the year since 2007.
Outlook mixed for cattle prices
The combination of tight supplies of feeder cattle, the recently constrained pace of cattle imports from Mexico due to protocols to mitigate the spread of New World screwworm, and uncertainty surrounding the terms of trade for cattle imported from Canada and Mexico are creating some volatility pushing prices higher for U.S. feeders and stocker operations to secure their cattle needs. In February, the weighted-average price for feeder steers weighing 750 to 800 pounds at the Oklahoma City National Stockyards was $270.67 per hundredweight (cwt). Although a decrease of $3.78 from January, it is likely due to unfavorable winter weather that reduced auction volumes and sale participation. However, in the first two weeks of March, sales receipts eclipsed receipts tallied in all of February and prices surged to an average $277.28 per cwt. As a result of recent price strength and firm demand for feeder calves, the price outlook for each quarter is raised $1 from last month for an annual price of $274.75 per cwt.
The reported prices for slaughter steers in the 5-area marketing region have also been mixed, although largely following a typical post-holidays seasonal decline in wholesale boxed beef prices. Although the average price in February was $202.60 per cwt, $1.89 lower than January, daily prices ranged from $197 to $207.16 per cwt. Through the first week of March, daily prices have ranged from $195 to $201.15 per cwt. Based on price data through early March, the first-quarter price forecast was lowered $3 to $202 per cwt. The second-quarter forecast is lowered $2 to $198 per cwt, based on the slower pace of slaughter in the second quarter and relatively softer demand than previously expected. The outlook for third- and fourth-quarter slaughter steer prices are unchanged from last month. As a result, the annual slaughter steer price forecast is lowered $1.25 to $199.50 per cwt.
2025 beef import and export forecasts raised
U.S. beef imports in January 2025 were a record 608 million pounds, over 100 million pounds (21%) higher than January 2024. Figure 1 shows January beef imports from the top suppliers to the U.S. The main contributor to the large year-over-year increase is imports from Brazil, up 42 million pounds from a year ago. Also contributing to the increase are imports from the rest of world (countries not in the top five suppliers), specifically Paraguay, which is up 28 million pounds. Paraguay became eligible to export fresh beef to the U.S. in December 2023, and imports began climbing throughout 2024. Both Brazil and Paraguay are subject to the tariff-rate quota open to countries without a specific quota or free trade agreement; this quota is set at 65,005 metric tons. Once it opens on Jan. 1, the quota is available on a first-come, first-served basis; after the quota is filled, imports are subject to higher tariff rates. In 2024, the quota was filled by March; this year, the quota was filled as of Jan. 17 according to the March 10 U.S. Customs and Border Protection Quota Status Report.
Based on the strong imports in January and continued demand for lean processing beef, the forecast for first-quarter beef imports is raised 100 million pounds to 1.33 billion, and the second-quarter forecast is raised 30 million pounds to 1.1 billion. The year-over-year growth in imports is expected to moderate in the latter half of the year; therefore, the third quarter is lowered 25 million pounds to 1.225 billion. Fourth-quarter projections are unchanged at 1.22 billion pounds, for an annual total of 4.875 billion pounds. If realized, this would be a 5% increase year over year.
U.S. beef exports totaled just over 230 million pounds in January, 1% lower year over year. Exports to China were up nearly 10 million pounds (31%) compared to last year. China has announced an additional 10% tariff that will apply to beef imports from the U.S.; however, U.S. beef imports to China represent a relatively small share of the imported beef market in China. The unit value of U.S. beef shipped to China is typically significantly more than other suppliers to China’s market. The majority of U.S. beef exports to China are high-quality products that tend to be associated with less price-sensitive demand. Therefore, the additional 10% tariff may not significantly impact U.S. beef exports to China.
In addition to China, January U.S. beef exports to South Korea and Canada were also higher year over year. However, these increases were more than offset by decreased exports to Japan, Mexico and Taiwan. Based on the slightly slower pace of exports in January, the forecasts for the first and second quarters are lowered 10 and 15 million pounds to 705 million and 730 million pounds, respectively. However, domestic beef production is expected to increase in the latter half of the year, therefore, export forecasts for the third and fourth quarters are raised 25 million pounds each to 700 and 685 million pounds, respectively. This sets exports at about 10% of production for those quarters. The annual forecast is now 2.82 billion pounds, which would be a year-over-year decrease of 6%.
