As ranchers look ahead to 2026, the beef markets present a mix of challenges and opportunities. Tight supplies, evolving trade dynamics and shifting consumer preferences will undoubtedly shape the year. Yet, with higher cattle prices forecast and signs of herd expansion on the horizon, there’s reason to remain cautiously optimistic.
Arming yourself with information and knowledge about what to expect might just help you start the year a step ahead.
In one of the latest Agricultural Market Outlook webinars hosted by South Dakota State University, Matthew Diersen, Griffith Chair in Agricultural Finance, shared what ranchers might expect in 2026.
Beef hits a headwind
In January 2025, the all-fresh beef retail price was almost $10 per pound.
“Beef is priced at a premium to pork and chicken, and through the last 12 to 24 months, beef has continued to go up,” Diersen said.
When discussing heifers and cattle on feed, he said that the data indicates a trend toward an expansion cycle.
In November in South Dakota, producers observed high prices being offered in the market. “Steers are normally priced at a premium to heifers,” Diersen said. “This was the case in ’25, but there were instances where we isolated animal deemed as replacement heifers priced above the same as steer prices.”
That optimism that went through the region’s sale barns was likely pushing the value of replacements higher and reflected the higher overall beef prices.
Continued concerns over New World screwworm mean that feeder cattle are not being imported from Mexico.
“As those feeder cattle continue to be halted, we see that almost no cattle have come across the border in the last eight to nine months,” Diersen said. “Typically, we’d see about 100,000 head per month come across.”
This halt, Diersen said, has done a lot to tighten the feeder cattle situation and reduce the number of cattle on feed.
“It’s hard to quantify the ultimate effect of that,” he said. “If the feeder cattle stay in Mexico, they might get finished in Mexico and supply the country directly, so we might see a decrease in beef exports from the U.S. to Mexico.”
Citing the January World Agricultural Supply and Demand Estimates report from USDA, Diersen said cattle-dressed weights throughout 2025 were much higher than in 2024.
“With tight supplies on cattle, feedlots are doing everything they can to put weight on,” Diersen said. “A typical carcass weight was hanging around 900 pounds, versus 815 pounds in the five-year average.”
Pricing expectations
Although basis for feeder cattle remained high in relation to the five-year average, Diersen said he does not expect a repeat of those prices going into 2026.
“You might take that five-year average and add just a little bit for the effects from 2025 into it,” he said.
On the other hand, Diersen recommended not using the five-year average to find a basis for stocker cattle.
“I would use either a recent average of basis, last month or the month before as a guide,” he said. “I’d do the math differently; I would use what I’m seeing for the price of corn, the price of hay, and throw a ration together, and that would give you some idea of what to use for a basis.”
Finally, he shared predictions from the Labor Market Information Center for expected cattle pricing in 2026:
- Live steers: $236 to $246, up from $224.54 in 2025
- Feeder steers, 700 to 800 pounds: $357 to $367, up from $329.76
- Feeder steers 500 to 600 pounds: $435 to $445, up from $402.17
The road may not be without its bumps, but 2026 holds the promise of growth and opportunity for those prepared to meet its challenges head-on. For the beef industry, the year ahead may be uncertain, but it’s also full of potential.
Find more insights about beef and crop markets from Diersen here.