The supply of cattle that on June 1 had been on feed for 150+ days is about 15% higher than a year ago and 28% higher than the five year average.  A consequence of this is the steady increase in fed cattle weights. Prior to 2025, we could not find an instance where steer weights gained 2% or more in two consecutive years. That changed last year, when steer weights gained 2.6% after gaining 2.5% the previous year. Our assumption at the start of the year that weights would increase by less than 2% in 2026 is sure to be proved wrong. We estimate that steer weights in the first six months of the year have averaged around 3.7% above a year ago and expect weights to be up around 3.2% for all of this year at an average 985 pounds. Heifer weights have not increased as much but still are expected to be up about 2.9% for the year. With more steers in the mix, we expect overall fed cattle weights to be up a little over 3% for the year, helping offset some of the shortfall in slaughter.

The slowdown in feedlot marketings means that even as on feed numbers are up vs. a year ago, packers still are not able to source enough cattle to hit their capacity utilization targets. Against this backdrop of deep packer losses, the industry has seen significant capacity reductions. In January, Tyson, completed the closure of a major cattle processing plant in Lexington, Neb., a (5,000 head/day capacity) and converted another major plant in Amarillo, Texas (5.,500 head/day capacity) to a single shift.  More recently, JBS announced the planned closure of a mid-size plant in Souderton, Pa., (2,ooo head/day) while workers at the Cargill plant in Fort Morgan, Colo., (4,700 head/day) have been locked out as union and management have not been able to negotiate a new contract.  The US cattle feeding and cattle processing sectors are undergoing a significant transformation, the result of which will be less processing capacity and higher beef prices.