Global Beef Supplies Face Prolonged Squeeze as U.S. Placements Drop

Beef output is sliding into a long downtrend, and the steepest drops may still be ahead.

After a steady start to the year, production began falling in May and has yet to find a floor. Industry analysts warn that the math is simple: fewer placements today mean leaner supplies tomorrow.

In August, placements of cattle fell sharply—down 10% compared with the same month in 2014. Texas, hit by a closed border with Mexico, saw placements plunge 18%.

Kansas slipped 11%, Iowa 13%. Nebraska held up better with a 4% decline, but its capacity to process cattle is drawing inventory north.

Within months, Nebraska is expected to surpass Texas in on-feed inventory.

So far, beef prices have been fueled by red-hot demand, not lack of supply. But with placements falling like stones, the market’s gears are grinding toward higher cash steer prices and record-breaking wholesale beef tags.

Brazil and Australia are moving in sync with the U.S., suggesting a global squeeze in beef production is looming over the next two years.

September brought a sharp correction. Choice beef cutout, which hit a record $413.60 in early August, slid to $382.05 by Sept. 20.

Analysts see further room to fall but expect a floor above last year’s $360. Cash steer prices softened only slightly, from $245 to $238, leaving packers squeezed as margins flipped from positive to negative.

Some see a peak forming, but others call it a pause before a bigger climb. The logic: as production contracts, the market must ration supply, and price is the blunt instrument to do it.

With interest rates easing and no economic collapse in sight, many expect the real peak in cattle prices to arrive late next year—or even 2027.

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