August 15, 2025

 

US consumers may brace for higher beef prices in 2026 

 

 

American beef lovers might face even leaner meals and higher prices next year, as US production declines to a decade low and tariffs restrict imports, according to a projection from the US government.

 

Total beef supply in the US is expected to drop 2.5 % in 2026 to 31.1 billion pounds—the lowest since 2019—the US Department of Agriculture (USDA) said in a monthly report. The decline threatens to push record beef prices even higher, with tariffs limiting importers' ability to soften the blow.

 

US beef supplies have been constrained by a shrinking herd. For years, ranchers have been culling cows due to a combination of persistent drought and high costs, reducing the domestic inventory to its lowest level in several decades.

 

Record prices for slaughter-weight animals have fueled expectations that ranchers will begin rebuilding the herd in 2026—but that would tighten supplies even further in the short term, as ranchers would need to retain more females for breeding rather than sending them to processors.

 

Meanwhile, the Trump administration has slapped hefty tariffs on shipments from Brazil, making supplies from the world's largest beef exporter more costly.

 

US beef production is expected to fall 1.8 % to 25.5 billion pounds next year, the lowest since 2016, while imports are projected to decline 6.1 % to 4.95 billion pounds, according to the USDA. Both forecasts were revised lower from last month.

 

Cheaper corn

 

Chicago corn futures fell to the lowest level in nearly a year after the USDA raised its already record-large outlook for the American harvest.

 

The USDA in a monthly report on August 12 estimated US corn production at 16.742 billion bushels, with a yield of 188.8 bushels per acre, with each surpassing estimates in a Bloomberg survey. That's after farmers planted more corn acres than a year ago and fields benefited from abundant rainfall and minimal damaging heat.

 

The harvest "if realised would be the highest production for grain on record for the United States," the agency said in its report.

 

Corn futures for December delivery fell by as much as 3.9 % to US$3.92 a bushel, the lowest since August 29.

 

While cheaper grain is welcomed by livestock and poultry producers as well as other food makers, the low prices are limiting farmers' spending power and hitting demand for fertiliser and farm machinery. Shares for some farm suppliers including AGCO Corp. and Nutrien Ltd. eased after the USDA report was released.

 

"Alarm bells are ringing across rural America following today's USDA report, and they should be ringing in the halls of Congress," said Geoff Cooper, president of the trade group Renewable Fuels Association, pointing to a need to raise demand for ethanol to reduce the inventory of corn.

 

Farmers favoured corn this spring in part due to the potential demand risks for soybeans, with the world's top soy importer China avoiding US crops amid the trade dispute with President Donald Trump.

 

Soybean futures notched gains of more than 1 %, with estimated output of 4.29 billion bushels falling below estimates for 4.374 billion even though yields were seen at a record.

 

The USDA said the harvested acres for soybeans were lower than its estimate a month ago, while harvested corn acres increased.

 

Meanwhile, cotton futures gained as US plantings are forecast to fall 17 % year-over-year to 9.28 million acres, which would be the lowest since 2015.

 

-      Bloomberg