The Beef Choice cutout climbed from $3.47 at the beginning of 2026 to above $4 for almost two weeks in mid-March. Despite Lent and typical seasonal weakness, momentum built in late February and accelerated sharply through March.

Historically tight cattle supplies combined with resilient consumer demand continue to push the beef market higher. With grilling season approaching, the market is going into familiar seasonal patterns at higher base cattle prices.

If upward momentum continues, the industry is approaching a test of the previous all-time high of $4.16, set in September 2025.

Fed cattle prices reached a new high of $2.49 live weight FOB in February before moderating. Over the past six months, prices have hovered around the median of $2.32, suggesting near-term stabilization even as cutout values rise.

One of the key outcomes of the Q1 rally has been the recovery in packer margins. The beef packer spread has moved from approximately $0.04 to $0.40 per pound of carcass weight, a meaningful shift that restores margin coverage for processing costs, labor, and capital reinvestment. While actual margins vary by operator, the directional improvement is clear across the industry.

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All major primals posted gains in Q1, but middle meats led the rally. Rebounding sharply from their December lows, loin and rib primals drove a disproportionate share of the cutout increase. Together they account for 1/3^rd of the cutout value. Plate, while only 7% of the cutout, showed strong improvement driven by skirt steak and trim demand.

Chuck and round posted more modest gains. Chuck and round primals carried momentum out of late 2025 before softening seasonally and leveling out at the end of quarter. Briskets are seasonal with typical rallies in the Summer, but BBQ season is positioning early. The key question is whether Briskets will get a second wave a momentum this Summer. If so, the primal and cut could easily see an all-time high in 2026. 

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The final closure of Tyson’s Lexington plant and the three-week strike at JBS’s Greeley plant show in the first quarter’s production volumes. Year-to-date 2026 slaughter totaled 7.369 million head, down 730,000 heads. Over the same 14 weeks, production totaled 6.59 billion pounds. This easily marks the lowest year-to-date production in the past five years. 

Heavier carcass weights have partially offset smaller herd sizes, but not enough to prevent a meaningful decline in total output. Compared to 2022, head count is down 17.2%, while total pounds produced are down only 11.8%, reflecting an average carcass weight increase of 55 pounds.

Summary

Q1 2026 marked one of the most aggressive beef market rallies in recent history, with Choice cutout values surpassing $4.00 for almost two weeks before softening marginally to the end March at $3.95. The move has been driven by tight cattle supplies, consistent demand, and structurally lower production volumes.

Margin recovery at the packer level has been significant, while pricing strength has been led by middle meats. Despite early signs of the cattle cycle turning, a return to historically normal herd sizes is expected to take multiple years, suggesting continued structural support for elevated price levels.