US beef packers slipped into negative margins last week for the first time since mid-August. A couple of weeks earlier they bid finished cattle up while wholesale beef prices sagged, and LEAP Market Analytics expects more red ink in the coming weeks.
The choice beef cutout is on track for its lowest weekly average since late July. Chucks and loins have been sharply on the defensive, and ribs, the star performer lately, are struggling to keep their momentum. Ribs and chucks were the only choice primals to average above year-earlier levels in October. Rounds have traded at unusually deep discounts to chucks since August, and with the two moving in opposite directions this week, that gap may finally be correcting.
Demand is the weak side. Adjusted for seasonality, wholesale beef demand looks to have stabilized after falling sharply through Q2 and Q3, but it is noticeably weaker than a year ago and is expected to stay below last year into 2027. With seasonal forces also leaning negative, LEAP expects the cutout to trend mostly lower into early next year.
Cattle traders have cooled too. December live cattle futures fell about 5% in a week. LEAP’s view for winter is close to the board but more bullish for spring and summer 2027, with slaughter-ready cattle numbers set to be extremely tight through at least Q1.
Read the full beef market analysis here.
