US cattle feedlots are expected to have placed approximately 1.56 million head during December 2025, representing a 4.9% decline from the previous year, according to projections from lea ahead of Friday’s USDA Cattle on Feed report.

The projected decline extends a six-month trend of actual placements falling short of model-implied estimates for available replacement feeder cattle. This ongoing disconnect stems primarily from restrictions on live cattle movement across the US-Mexico border due to protocols containing New World Screwworm.

December marks a significant baseline shift in year-over-year comparisons, as no feeder cattle entered the US from Mexico during December 2024 when initial trade restrictions were implemented. This creates potential for an upside surprise in the placement figures, though rapidly deteriorating feedyard margins present a strong counterpoint to increased placement activity.

Feedyard economics under pressure

Current cash returns for cattle feeders remain barely positive, with the outlook for 2026 appearing decidedly negative. The primary challenge stems from substantial premiums paid for replacement stock that are not being offset by corresponding increases in fed cattle prices.

This growing imbalance between replacement costs and fed cattle market values is placing both feedyards and packers in “margin protection mode.” The financial stress being experienced by both segments of the supply chain is expected to result in fewer cattle being marketed than overall cattle inventories might suggest.

LEAP Market Analytics projects December marketings of fed cattle at 2.4% above prior-year levels, positioning near the top end of analyst estimates. The average analyst forecast in Bloomberg’s monthly survey projects a 6.9% decline in placements, with LMA’s estimate falling in the middle range of projections.

Inventory projections and feed costs

Total inventories of cattle on feed are projected at 11.45 million head as of January 1, down 3.2% from the same date last year. This figure aligns closely with average analyst expectations.

December’s projected placements would represent a deficit of nearly 123,000 head compared to model-implied estimates of replacement feeder cattle available for placement during the month. November featured an even larger deficit of 187,000 head.

Cattle feeders received positive news with confirmation that 2025’s corn crop reached record US production of slightly more than 17.0 billion bushels. Carryover stocks from the 2025/26 marketing season appear likely to reach approximately 2.25 billion bushels, which should keep corn prices anchored in the low-to-mid $4 range on a cash basis.

Border restrictions impact supply chain

The absence of feeder cattle imports from Mexico represents a significant shift in supply dynamics. While December 2024 serves as a zero baseline for comparison, this won’t hold for subsequent months. Feeder cattle imports from Mexico averaged 53,000 head monthly from February through May 2024.

The supply bottleneck created by reduced placements and margin pressures could push cattle on feed inventories back into positive territory on a year-over-year basis by late 2026, despite current deficits.

Demand outlook

Wholesale beef demand remains strong, with ribs representing the only primal cut trading below year-ago levels. However, demand is showing signs of weakness even after accounting for seasonal patterns.

LEAP Market Analytics projects that demand will not hold up sufficiently to support current upstream cattle market levels without significant financial pressure being felt downstream in the supply chain. This pressure is expected to affect feedyards, packers, food retailers, and consumers throughout 2026.

This article is part of a more comprehensive cattle market analysis, for the full analysis, visit: https://app.vespertool.com/market-analysis/2618