AMERICAN ANGUS ASSOCIATION - THE BUSINESS BREED

Market Closeout

Looking back at the 2025 cattle market and forward to opportunities in 2026.

By Troy Marshall, Director of Commercial Industry Relations

December 17, 2025

As the calendar turns, 2025 will be remembered as one of the most unusual — and instructive — years the beef industry has experienced in decades. It was a year defined by tight cattle numbers, strong prices, and a supply chain that was constantly adjusting to biological reality. For cow-calf producers, it was a reminder that while markets move in cycles, the decisions we make at the ranch level continue to shape our long-term opportunity.

A look back at 2025

From a big-picture standpoint, 2025 was all about scarcity. The U.S. cow herd remained near historic lows, the result of multiple years of drought, high input costs and forced liquidation. In addition, the border with Mexico was largely closed hoping to prevent the introduction of New World screwworm (NWS). As a result, calf prices, feeder-cattle values, and fed-cattle prices pushed to record or near-record levels.

For many commercial cow-calf operations, this translated into some of the strongest revenue years in memory. Even average cattle were worth good money. Replacement females commanded premiums. The industry was rewarded simply for having cows.

Producers who can consistently deliver cattle that hit Certified Angus Beef^® and Prime targets, meet branded program specifications, and perform efficiently are no longer competing in a commodity space. They are competing in a value-based marketplace, where premiums are earned, not assumed.

But 2025 also exposed stress points. Packers faced inconsistent and declining harvest numbers and were forced to adjust capacity. Feedlots paid historically high prices for feeders and had less room for error. Retail beef prices climbed, increasing pressure on consumer demand and sharpening the focus on value and eating experience.

In short, 2025 was profitable — but fragile. Everyone in the chain was reminded that when supply is tight, efficiency, predictability and quality matter more than ever.

What 2025 taught us

One of the most important lessons of 2025 is that the market does not reward all cattle equally, even in strong price environments. While averages were high, the cattle that performed the best — on the rail, on the grid and in the branded beef space — quietly separated themselves.

Quality grade continued to be one of the clearest dividing lines.

Even as Choice-Select spreads narrowed at times, cattle that consistently graded in the upper two-thirds of Choice and Prime still found homes in value-added programs, branded beef supply chains, and grid systems that reward carcass merit. Cattle that missed quality targets were more exposed as feed and placement costs climbed.

That distinction will only grow more important as we move into 2026.

Looking ahead to 2026

As the industry looks forward, 2026 will likely be another year of tight supplies, but with a few important shifts underway.

First, the conversation around herd rebuilding is becoming more serious. If moisture cooperates and input costs stabilize, heifer retention will begin in earnest. However, meaningful herd expansion takes time. Beef production will not rebound overnight, and supply will remain constrained.

Second, as cattle prices stay high, buyers will become more selective, not less. When every animal represents a major investment, feedlots, packers, and branded programs will increasingly favor cattle with known genetics, documented performance and predictable carcass outcomes.

That puts quality grade — and the ability to prove it — squarely in the spotlight.

Quality as a differentiator, not a bonus

Historically, quality grade was often treated as a “nice to have.” In today’s market, it is becoming a strategic differentiator.

Producers who can consistently deliver cattle that hit Certified Angus Beef^® (CAB^®) and Prime targets, meet branded program specifications, and perform efficiently are no longer competing in a commodity space. They are competing in a value-based marketplace, where premiums are earned, not assumed.

This shift places more importance on:

Genetic selection focused on marbling, carcass weight and feed efficiency
Replacement female strategies that align maternal function with carcass outcomes
Data and documentation that reduce risk for downstream partners

As we move into 2026, the question will not simply be, “What are cattle worth?” It will be, “Which cattle are worth more — and why?”

The opportunity for cow-calf producers

The encouraging news is that commercial cow-calf producers are uniquely positioned to influence this outcome. Quality does not start in the feedyard or the packing plant. It starts with bull selection, replacement decisions and a clear understanding of the market signals being sent today.

The producers who will be best positioned in 2026 and beyond are those who:

focus on repeatable quality, not one-time highs;
align genetics with real-world market demands; and
embrace tools that help tell their cattle’s story.

2025 rewarded cattle ownership; 2026 will reward intentionality.

Strong markets come and go, but quality — and the ability to differentiate it — is what sustains profitability across cycles. As the industry moves forward, the opportunity is clear: build cattle that don’t just sell, but stand apart.

Editor’s note: Troy Marshall is director of commercial industry relations for the American Angus Association.

Angus Beef Bulletin EXTRA, Vol. 17, No. 12-B

Topics: Marketing , Management

Publication: Angus Beef Bulletin