The forecast for 2026 suggests stability in average fed cattle prices, mirroring the $2.25/lb average of 2025. However, price volatility is expected to decrease, with a narrower trading range than the $50 per hundredweight spread seen previously.
The speaker indicates that both feeder and fed cattle markets are at or near their cyclical highs. Historically, such peaks are followed by a market correction as supply and demand dynamics shift.
Current high prices are partially supported by trade disruptions, including tariffs and reduced cattle flows from Mexico. The normalization of these trade conditions is identified as the primary trigger for a future market correction.
Profitability across the sector is varied. Cow-calf producers benefit from strong prices due to slow herd expansion, while feeders are supported by a relatively low cost of gain, around $1 per pound.
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