Introduction

The U.S. beef and pork markets are experiencing significant price fluctuations, production shifts, and external pressures. This report provides an in-depth analysis of key trends, supply dynamics, and policy impacts shaping the industry to start the year.

Beef Market Overview

Price Trends

Beef prices have surged due to tightening supplies and strong consumer demand. The Choice Cutout has reached $333.51 per cwt, marking a 17.7% year-over-year increase and a 58.2% rise since 2021 (Drovers). The Select Cutout has also seen substantial gains, driven by steady retail and food service demand.

Supply Constraints

U.S. cattle inventories have declined to their lowest levels since 1951, driven by prolonged drought conditions and high feed costs, forcing producers to cull their herds. As a result, beef production has contracted, amplifying price pressures.

Consumer Demand

Despite higher prices, consumer demand remains resilient. Spending on fresh beef increased by 9% in 2024, suggesting strong consumer preferences amid inflationary pressures. This persistent demand and constrained supply continue to push prices upward.

Pork Market Overview

Price Movements

The pork sector has experienced moderate price shifts. The CME Lean Hog Index currently sits at $82.11, reflecting a $0.17 increase (New Frontier). Meanwhile, the pork carcass cutout value is $92.86, showing a minor decrease of $0.30, with a five-day average of $91.93.

Production and Expansion

Unlike the cattle sector, pork production is expected to grow by 2.6% in 2025, reaching 28.5 billion pounds. This increase is supported by a 2% year-over-year rise in the September–November pig crop, which reached 35.2 million head, and an improved litter rate of 11.92 pigs per litter (SwineWeb).

Export Market Trends

U.S. pork exports have risen by 6% year-over-year, totaling 644 million pounds in November 2024. Notably, exports to China and Hong Kong surged by 69%, while Australia saw a 31% increase. However, exports to Mexico, the largest importer of U.S. pork, saw a slight decline, now accounting for 36% of total exports (SwineWeb).

External Influences on the Meat Industry

Trade Policy Risks

Potential 25% tariffs on imports from Canada and Mexico could significantly affect the meat industry, raising costs for imported products and prompting retaliatory actions that may hinder U.S. exports (Reuters).

Weather-Related Challenges

Frigid weather across key cattle-producing states has further tightened beef supplies, increasing prices. Cold conditions have forced cattle off grazing lands, reducing weight gain and growing feedlot costs.