A White House official said in October that Trump would make such a move, evoking fury from the nation’s cattle ranchers.

Trump has faced pressure to address the issue of affordability, which helped propel Democratic candidates to several electoral victories in 2025.

U.S. beef prices set record highs last year, benefiting ranchers who largely supported Trump, due to strong consumer demand and declining cattle supplies.

Ranchers slashed the herd to its lowest level in 75 years as of January 1 following a persistent drought that burned up pastures used for grazing and hiked feeding costs, according to U.S. data.

Unlikely to significantly lower beef costs

Trump’s decision to raise the tariff rate quota on Argentine beef by 80,000 metric tons will let Argentina ship more of its beef to the U.S. at a lower rate of duty. The increase will apply only to lean beef trimmings, which are blended with domestic supplies to make hamburger meat, according to the proclamation.

“Instead of imports that sideline American ranchers, we should be focused on solutions that cut red tape, lower production costs, and support growing our cattle herd,” said Republican U.S. Senator Deb Fischer of Nebraska, a major cattle-producing state.

Washington and Buenos Aires signed a broader new trade and investment agreement that will give preferential market access to U.S. goods in Argentina.

Economists have said increased U.S. imports of Argentine beef will likely be too small to significantly lower costs for grocery store shoppers, but the shipments could help improve margins for food companies.

The U.S. imported about 33,000 metric tons of Argentine beef in 2024, representing two per cent of total imports, according to government data.

— Reporting by Tom Polansek, Ismail Shakil and Bhargav Acharya

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Jerry Klassen, a commodity market analyst at Resilient says he has heard stories about margins being negative $500 to $700 per head in a pen close-out in early December.

WHY IT MATTERS: Even in a booming cattle market, industries within the supply chain have to navigate the waters properly for maximum profit.

Learning from history can keep producers ahead of the curve with emerging trends to plan accordingly, he told a recent cattle market analysis meeting in Lethbridge.

He said the U.S. steer-heifer slaughter this year will be down by approximately one million head from 2025. Beef cow slaughter is expected to be down 200,000 head and dairy cattle are expected to be static, making for tighter supplies as demand increases.

Live prices in Alberta are expected to be $345 to $355 per hundredweight in the peak periods between June and August, while dressed prices are expected to reach $560 to $580.

“Wholesale beef prices are currently at seasonal lows. January and February are usually the two lowest months of demand. But we’re looking for wholesale beef prices to make historical highs in June, July, August,” said Klassen.

Prices are expected to soften in the latter part of 2026, and North American restaurant purchasing will be a strong indicator of overall demand.

“We know that restaurant spending increases from March through June. It peaks in the summer months. U.S. market-ready cattle supplies will decline from February through June, so we have lower supplies coming in the summer, with lower fed cattle supplies and stronger demand. During the summer, you are at a sharp premium to the Alberta market, so that enhances exports fed cattle.”

Klassen said he prefers not to look too closely at retail beef prices because the commodity is often used as a loss leader for discounts to get shoppers in the store. Plus, alternative proteins such as chicken are artificially boosted in Canada by supply management.

Business cycles that transition from recession to recovery eventually find themselves at a peak with the highest point of economic spending.

The COVID-19 pandemic in 2020 featured record government stimulus in North America, including in Canada, where the federal government infused $271 billion and the Bank of Canada dropped its interest rates and spent $370 billion in quantitative easing (buying bonds). This led to unprecedented demand and a profitable period for cattle feeding in 2021-22.

The U.S. fed rate is currently hovering around 3.6 per cent, pushing borrowing costs to its lowest levels since 2022.

“Besides COVID and the sub-prime recession, this is the loosest monetary policy we have had in the last four years,” said Klassen, adding that the Bank of Canada rate of 2.25 per cent is more than half its peak rate of five per cent.

Trump’s “Big Beautiful Bill” is promising more stimulus with larger child tax benefits and moderate income Americans receiving $2,000 for a cost of $600 billion.

Canada is expected to run a deficit of $265 billion over the next four years.

Klassen said the “unprecedented” value of assets is encouraging borrowing and spending, while the Dow Jones and Canadian Stock index are at historical highs. This is fuelling higher demand, which when coupled with lower supply should help keep prices high.

“A one per cent increase in consumer spending equates to a one per cent increase in beef demand,” said Klassen.

“When the equity markets are at historical highs, typically the unemployment rate starts to go down. Disposable income increases, wages continue to increase. This is positive for consumer spending, and it’s positive for beef demand.”

He said history has shown that there needs to be a year of historically high prices before heifer retention occurs in the cow-calf sector. Then it takes one-and-a-half years for the for those calves to come on the market.

“Some initial expansion of the cattle herd is happening. There is likely going to be a small increase (in 2026),” said Klassen.

The first big wave of heifer retention will show up as the calendar flips into 2027, which tightens feeder supplies further before any real increase in calf crop shows up.

“When there is that first big round of heifer retention, the feeder market overextends to the upside, because there is less heifers. Usually, when the price for corn or a normal commodity market, you have higher prices, you increase acreage, six months later, you have a bigger crop.”

Klassen encouraged people in the market to pay close attention to the Commitment of Traders report, often indicating the top/bottom of the market.

“When the packer is full, he can’t buy any more cattle. The elevator is full and there’s no vessel coming in,” said Klassen.

Four companies (Tyson Foods, JBS, Cargill and National Beef Packing) buy 75 to 85 per cent of the fed steers and heifers.

The feeder market needs to move high enough when supplies are tight so that finishing feedlots endure one round of negative margins.

In the fall of 2026, feedlots should be fine with snug margins through the summer because that will be when the fed cattle market will be at historical highs.

Producers should be wary of the next round, he added.

“In the fall, you will be buying calves and yearlings right at the roof, so you have to postpone it or manage it accordingly. When you have to reload is going to be the challenge.”

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The exported volume reached 853,183 tons of bone-in beef equivalent, the ministry added in a statement.

The administration of U.S. President Donald Trump in October of last year said it was quadrupling low-tariff imports of Argentine beef in an attempt to lower grocery store beef prices.

In addition to the U.S., Argentina consolidated key international markets including the European Union, China and Israel, the statement added.

The ministry said international beef prices in December 2025 rose 35.6 per cent compared to the same month in 2024, reaching the highest nominal level in the sector’s history.

— Reporting by Gabriel Araujo

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Brazil was already the biggest beef exporter, shipping meat worth almost $17 billion (C$23.5 billion) in 2025, according to government trade data released on Tuesday. Beef production numbers are not due until February, but analysts have recently raised their estimates. Farmers have been sending more animals to slaughter, cashing in on high export demand from countries including China and the U.S., where low supply has pushed beef prices to record levels.

Production out-performs forecasts

Elevated slaughter typically leads to a period of low output as producers hold back animals to breed and rebuild herds. But productivity gains in Brazil may limit or even prevent a downturn, people in the industry say. They noted that farms have been inseminating cattle quicker, fattening them faster and slaughtering them younger.

“Ten years ago, the average age of cattle slaughtered in Brazil was five years,” said Vinicius Barbosa, a commercial manager responsible for tens of thousands of cattle at the CMA feedlot in Barretos, about 260 miles (420 km) north of Sao Paulo. “Now it is 36 months and going rapidly to 24,” he said.

Mauricio Nogueira, head of livestock consultancy Athenagro, said Brazilian beef production far surpassed his forecast in 2025. Output grew 4 per cent for the year, where he had predicted a 2.7 per cent drop. The increase of around 800,000 tons was about equal to total annual exports of Argentina, the world’s No. 5 beef shipper.

Rabobank, which had expected Brazil’s beef production to decline in 2025, now sees 0.5 per cent growth to 12.5 million tons carcass weight equivalent. The U.S. Department of Agriculture in December raised its estimate for Brazilian beef output by 450,000 tons to 12.35 million tons.

If the official numbers confirm market estimates, 2025 will be the first year that Brazil’s output will have surpassed U.S. production, which fell 3.9 per cent to 11.8 million tons in 2025, according to USDA estimates, following years of drought.

Feedlots, rising carcass weight drive output

U.S. beef production will fall a further 0.9 per cent to 11.7 million tons in 2026, the USDA said. In Brazil, the USDA and Rabobank project a decline in output, but Nogueira said rising productivity could actually boost Brazil’s production by around 300,000 tons.

Almost 28 per cent of cattle slaughtered in Brazil will be fattened in feedlots by 2027, up from 22 per cent in 2025, according to consultants Scot Consultoria.

“Feedlots do in 100 days for cattle what pasture does in between 18 and 24 months,” said Barbosa, adding that CMA’s Barretos feedlot would process 80,000 cattle in 2026, up from 65,000 last year.

Brazil’s booming corn ethanol industry is generating a byproduct known as dried distillers grains that has higher protein than corn and helps cattle fatten faster, analysts said.

Cows are becoming pregnant more often as farmers adopt more efficient insemination techniques, allowing producers to slaughter more animals without reducing herd size.

Scot Consultoria expects Brazil’s pregnancy rate – the proportion of females that become pregnant during a breeding season – to rise to 54 per cent in 2027 from an expected 50 per cent in 2026.

Better genetics are also improving cattle growth and boosting meat quality, analysts say. And Brazil still has not matched the 90 per cent proportion of cattle passing through feedlots as in the U.S., or Australia’s 40 per cent.

If Brazil’s pregnancy rate rose to 66 per cent, equivalent to neighbouring Argentina, the number of calves birthed each year would rise from an estimated 32 million to 40 million, according to consultants Datagro. The pregnancy rate in Canada is 96 per cent, they said.

Government data show Brazil has 238 million cattle, well over double the 94 million in the U.S. Higher productivity would allow output to expand without increasing cattle numbers or the area of pasture land. That could ease one economic driver of deforestation of the Amazon rainforest.

Brazil’s cattle herd is expected to grow just four per cent between 2024 and 2034 while beef production increases 24 per cent, according to Brazilian beef exporter group ABIEC. U.S. beef production will rise 3.5 per cent and cattle numbers will grow five per cent over that period, by USDA estimates.

Brazil key as top producers scale back

Global beef prices will hinge on whether Brazil can avoid a production downturn this year.

The USDA expects output in the world’s six biggest producers to fall in 2026 by a combined 2.4 per cent – the biggest annual drop in decades – after rising 0.4 per cent in 2025. These producers are Brazil, the U.S., China, the European Union, Argentina and Australia. The list excludes India, which the USDA names as one of the six top beef producers even though that country produces buffalo meat rather than beef.

The USDA expects Brazilian production to fall 5.3 per cent to 11.7 million tons carcass weight equivalent this year. If Nogueira’s estimates are confirmed and output rises instead to around 12.6 million tons, the decline in the top six producers would be just 0.2 per cent.

“There has never been so much international demand for Brazilian beef,” said Guilherme Jank, a Datagro analyst, adding that local beef packers have also ramped up capacity.

“We are witnessing firsthand a significant shift in how the beef cattle supply system works in Brazil, in terms of quality, scale, efficiency, and productivity,” he said.

— Additional reporting by Ella Cao in Beijing and Tom Polansek in Chicago

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China’s commerce ministry said on Wednesday the total import quota for 2026 for countries covered under its new “safeguard measures” is 2.7 million metric tons, roughly in line with the record 2.87 million tons it imported overall in 2024.

The new annual quota levels are set below import levels for the first 11 months of 2025 for top supplier Brazil as well as for Australia.

“The increase in the amount of imported beef has seriously damaged China’s domestic industry,” the ministry said in announcing the measure following an investigation launched last December.

The measure takes effect on January 1 for three years, with the total quota increasing annually.

Beef imports to China fell 0.3 per cent in the first 11 months of this year to 2.59 million tons.

China’s beef sector not competitive

Chinese beef imports will decline in 2026 as a result of the measures, said Hongzhi Xu, senior analyst at Beijing Orient Agribusiness Consultants.

“China’s beef-cattle farming is not competitive compared with countries such as Brazil and Argentina. This cannot be reversed in the short term through technological advancements or institutional reforms,” Xu said.

In 2024, China imported 1.34 million tons of beef from Brazil, 594,567 tons from Argentina, 243,662 tons from Uruguay, 216,050 tons from Australia, 150,514 tons from New Zealand, and 138,112 tons from the U.S.

In the first 11 months of this year, Brazil shipped 1.33 million tons of beef to China, according to Chinese customs data, well above the quota levels set under Beijing’s new measures.

Also this year, Australian shipments to China have surged, gaining share at the expense of U.S. beef after Beijing in March allowed permits to expire at hundreds of American meat plants and as President Donald Trump unleashed a tit-for-tat tariff war. U.S. shipments stood at just 55,172 tons through November.

Australian beef exports to China stood at 294,957 tons in the first 11 months of 2025.

China hasn’t imported Canadian beef since 2021 after a case of atypical BSE was found in Alberta.

Brazil expect supply chain adjustments

China’s move comes as a global beef shortage pushes up prices in many parts of the world, including to record highs in the U.S.

Responding to Beijing’s announcement, Mark Thomas, chair of the Western Beef Association in Australia, said: “There’s plenty of other countries that will take our product.”

Luis Rua, secretary at Brazil’s agriculture ministry, said there is no reason “to panic”, telling Reuters that the government can negotiate “compensatory measures” with China to offset the impact of the new tariffs.

In a telephone interview, Rua also mentioned Brazil’s ability to redirect beef exports to other countries.

Brazilian industry groups, on the other hand, expressed concern.

In 2025, Chinese imports of Brazilian beef totalled approximately 1.7 million tons, equivalent to some 48 per cent of the volume exported by Brazil overall, said beef lobby Abiec in a statement.

“Given this scenario, adjustments will become necessary throughout the entire supply chain, from production to export, to avoid broader impacts,” Abiec noted.

Brazil’s other beef lobby Abrafrigo said the potential impact of China’s safeguard measures could mean a loss of up to $3 billion (C$4.1 billion) in export revenue for Brazil in 2026.

This year, Brazil’s total beef export revenues are estimated at $18 billion (C$24.7 billion), Abrafrigo said.

Domestic protection

China made its announcement following two extensions of its beef import probe, which officials say does not target any particular country.

The tariffs will help curb the decline in China’s breeding cow inventory and buy time for domestic beef enterprises to make adjustments and upgrades, said Zengyong Zhu, a research fellow of the Institute of Animal Science of the Chinese Academy of Agricultural Sciences.

Beijing has stepped up policy support for the beef sector this year and said in late November that cattle farming had been profitable for seven consecutive months.

— Reporting by Liz Lee, Shi Bu, Daphne Zhang, Ella Cao; Additional reporting by Helen Clark in Perth, Gabriel Araujo and Ana Mano in Sao Paulo and Rodrigo Viga Gaier in Rio de Janeiro.

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Fifty-five years later, after surviving bouts of extreme weather, changing consumer tastes and global trade disruptions, the Westside, Iowa, farmer faces an unexpected risk from the man he backed for U.S. president: Donald Trump.

Facing intense frustration from voters over rising everyday costs, Trump declared this fall that beef was too expensive and ranchers must lower cattle prices. The price of beef was “higher than we want it, but it’s going to be coming down soon,” Trump said.

‘Not a happy Trump supporter’

Much like the price of eggs during the Biden administration, the cost of beef has become an emblem of the affordability crisis in America. Beef prices hit record highs earlier this year as the cattle herd shrank and consumer demand remained strong.

Trump’s comments shocked ranchers, who largely voted for the president. Then his administration announced plans to quadruple low-tariff U.S. imports of beef from Argentina, launched an investigation into meatpackers for price manipulation, and removed duties that Trump imposed over the summer on imports of Brazilian beef.

The series of moves knocked down cattle markets but did not significantly lower the cost of beef at grocery stores, causing ranchers, typically straight shooters, to speak up.

“It would have been nice if Trump hadn’t said anything,” Vetter said. “I’m still a Trump supporter. I’m just not a happy Trump supporter.”

Reuters spoke with a total of eight ranchers who said they still backed Trump, though he hurt prices for their cattle.

On the day Trump first said his administration was working to lower prices, Feeder cattle futures dropped by an exchange-imposed maximum that limits how far prices can fall each day. They sank by 21 per cent over a little more than a month after reaching a high on October 16.

Ranchers feel the heat

The selloff sliced profits for ranchers, pushed livestock buyers from making purchases, and chased away speculative traders as cattle markets turned increasingly volatile, cattle producers and traders said.

“It’s affected the price that we as ranchers are getting; it’s affected what feedlots are getting; but it hasn’t done anything that I’ve seen or heard about yet to impact what the consumers are paying,” said Marty Smith, 66, whose family has been ranching in Wacahoota, Florida, for 175 years.

Cattle futures started rising in late November following their steep slide but remain below where they were before Trump’s comments. Economists said it would likely take months for retail beef prices to reflect the setback in cattle markets. Impacts on retail prices would also be less dramatic because meatpackers, wholesale distributors and retailers stand between ranchers and consumers and add to costs, they said.

Many cattle ranchers also raise crops, and cattle had been a bright spot for their businesses as grain and soybean prices slumped due to large supplies and Trump’s trade policies. Trump unveiled a $12 billion aid package intended mostly for crop growers this month.

Cattle prices had reached record highs throughout 2025 after years of drought dried up grazing lands and forced producers to slash the nation’s herd to its smallest size in decades. As a result of the decline, the U.S. for the first time in 2025 lost its spot as the world’s biggest beef producer to Brazil, according to U.S. government estimates.

Cattle supplies tightened further after the Trump administration halted U.S. imports of Mexican livestock to keep out New World screwworm, a flesh-eating parasite.

As tight supplies raised costs for meat processors, Tyson Foods said in November it would permanently shut a major U.S. beef plant, removing a market for cattle. The U.S. Department of Agriculture this month lowered its estimates for cattle prices through 2026 in part because of the impending closure.

Trump has accused meatpackers such as Tyson of driving up beef prices through manipulation and collusion, and ordered the Justice Department to investigate. Meatpackers said their industry is heavily regulated, and transactions are transparent.

Sticker shock in the grocery aisle

The retail cost of ground beef in November climbed to $6.54 per pound (C$8.94) from $5.63 per pound a year earlier, up 16 per cent, according to the latest data from the Bureau of Labor Statistics. For boneless stew meat, retail prices jumped 23 per cent to $9.17 per pound (C$12.54) from $7.43 per pound.

Since Trump’s comments in mid-October, wholesale prices for select cuts of beef shipped to buyers in large boxes were up 0.5 per cent as of Monday, while wholesale prices for choice boxed beef eased one per cent, according to U.S. data.

High prices for a range of goods, including beef, coffee and electricity, have upset consumers and frustrated Trump. A recent Commerce Department report showed annual inflation rose at its fastest pace in nearly 1-1/2 years in September.

Democrats exploited voters’ angst about the economy in recent state and local election victories, campaigning in 2024 on a pledge to lower consumer prices.

“The Trump administration is taking a whole-of-government approach to lowering beef prices, with multiple agencies slashing regulations, supporting small processing facilities, and taking other actions to support both ranchers and consumers,” White House spokesperson Anna Kelly said.

Who will rebuild the herd?

Ranchers felt beef was targeted unfairly because costs were high for a number of goods.

“It’s a sock in the gut for all of us,” said Dean Meyer, 62, a Rock Rapids, Iowa-based cattle feeder who temporarily paused buying cattle last month due to increased uncertainty and falling prices.

Eight ranchers in rural America said that they still supported Trump because of his stances on immigration and other issues, after voting for him in the last presidential race. But for some of them, Trump’s interference in the beef market shook their confidence in him.

“He’s waged war against a group of producers that literally have no real effect on the price of beef in the store,” said Todd Hertzog, owner and operator of beef processor Hertzog Meat Company in Butler, Missouri.

A fledgling effort to rebuild the nation’s cattle herd , which economists say would eventually help reduce beef prices, is at risk after Trump injected uncertainty into the market over imports, ranchers and economists said.

Falling cattle prices did not help.

Vetter, who buys young cattle to fatten for sale to meatpacker Cargill, said he paid about $2,500 per head for 450 steers weighing about 500 pounds each around the end of October. By the end of November, the price had dropped by about $300.

At the same time, meatpackers were willing to pay less to buy cattle that Vetter feeds to weigh about 1,650 pounds.

Reached just before Thanksgiving, Vetter said that he was facing potential losses of $250,000 on his recent cattle purchases after prices tumbled.

“The president can do whatever he wants but it’s going to be hard to build the cow herd if we don’t have some stability,” Vetter said. “I’m going to push a pencil really hard before I buy that next set of calves.”

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But while the future can’t be known for sure, there are certain trends that analysts look for when making market forecasts.

Heifer retention is a big one, said Lee Irvine, a beef specialist with ATB Financial, during a recent the Cattle, Commodities and Market Insights conference in Brooks, Alta.

“I watch it religiously, with every single kind of cattle on feed and placement side. That tells me where our numbers are at. If the heifers are hitting the feed yard, they’re not going to get bred back,” said Irvine.

However, a deeper dive into the numbers is necessary.

Heifer retention is down by approximately six per cent in the last cattle-on-feed reports.

However, the number jumps to 30 per cent when looking at the 600- to 800-pound weight category.

Irvine has not seen the latest cattle-on-feed reports from the United States because of the U.S. government shutdown, but is seeing similar trends there as well.

“So the question now that we can’t answer from a key performance indicator is, ‘OK, are those cattle going to stay on the ranch and actually go into the cow herd and continue to expand the cap, or are they just waiting until the fall to market them?’” Irvine said.

Checking the price of beef at the grocery store can help gauge consumer patterns, said Anton Bellot, director of agri-business and agri-food for ATB Wealth.

He last checked numbers that showed that for every dollar Canadians earn, they are $1.40 in debt.

“It is quite substantial, and that’s making a huge impact on the grocery shelves. That’s probably the number-one leading indicator I look at. Whether it’s on a beef producer, or on the cropping side, that commodity has to get value added to end up on a grocery store or in a restaurant,” said Bellot.

Canadian consumers have responded to American tariffs with “buy local” efforts, but in the end, he said, the price tag reigns supreme when family budgets are so tight.

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The company said third-quarter profit dropped to $581 million (C$815.1 million) from $693 million in the year-ago quarter, citing negative beef margins in the U.S. amid multiyear-low cattle supplies.

Why it matters: Diminished beef cattle herds in North America have led to record-high prices for cattle producers as processors compete to fill demand.

“The industry continues to navigate a challenging cattle cycle, with limited cattle availability for processing,” JBS said in the earnings statement. “With cattle supplies at historically low levels, live cattle prices have remained high, pressuring profitability.”

In remarks about results, CEO Gilberto Tomazoni noted the situation is unlikely to be resolved soon.

JBS’s adjusted earnings before interest, taxes, depreciation and amortization, a measure of operating income known as EBITDA, came in at $1.835 billion (C$2.574 billion), smaller than the $2.153 billion reported a year ago, the company said.

Net sales, however, rose by 13 per cent to $22.6 billion in the third quarter, having grown across all business segments, the company said.

Regarding Brazilian beef operations, JBS reported strong net sales growth, driven mainly by exports and increases in both sales volumes and prices, as well as by higher meat prices in the domestic market.

Tomazoni said that in 2026, Brazil’s cattle herd might be slightly reduced as more female cows were processed compared with male ones in the second quarter.

Brazil, where JBS was founded, is the world’s largest beef exporter. It still boasts the world’s biggest commercial cattle herd.

For its Seara processed foods division, JBS said it posted the highest export volume in history despite temporary trade bans imposed by key importers such as China and Europe due to an avian influenza case in Brazil in May.

The company said those restrictions forced it to redirect certain chicken meat cuts to other markets, which drove a price drop.

The appreciation of the Brazilian currency also negatively affected the company’s meat exports out of Brazil, Tomazoni noted.

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Brazil is the world’s largest beef exporter, with China as its main trading partner. In August, Mexico overtook the U.S. to become its second-largest export destination for the commodity.

“It is very likely that countries that can triangulate Brazilian beef will increase their purchases following Mexico’s example,” Mauricio Nogueira, director of livestock consultancy Athenagro, said in an interview. “If Mexico starts sending beef to the U.S., it will have to buy from someone, it will have to buy from here.”

Argentina would be another candidate to import and eventually re-export Brazil’s beef to the U.S., he added.

Nogueira’s Athenagro did not change its year-end projection for Brazil’s beef exports after Trump’s 50 per cent tariffs on the country’s products took effect on August 6. His consultancy is projecting a 7.5 per cent increase this year in Brazilian beef exports, to 3.08 million metric tons. Through July, such exports rose more than 13 per cent.

Luis Rua, secretary of trade at Brazil’s agriculture ministry, said Brazilian beef helps keep Mexican inflation in check. Whether Mexico will re-export supplies from Brazil is unclear.

“We send it to Mexico, but we don’t know exactly what Mexico will do with the meat,” he told Reuters.

Economist Thiago de Carvalho confirmed expectations of a shift in global beef flows, with Brazil potentially selling to markets previously served by Australian exporters, for example.

Factors such as tight global beef supplies, which the U.S. is facing after its cattle herd hit historical lows, may also direct demand to Brazil, Carvalho added.

Japan, which traditionally buys meat from the U.S., may soon open up for Brazilian products, he said.

— Reporting by Roberto Samora in São Paulo and Kylie Madry in Mexico City.

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In South Dakota, Troy Hadrick kept 16 more heifers on his farm than he did last year to be used for breeding, rather than sending them to be slaughtered for beef.

More than 1,400 miles south in Texas, the biggest cattle-producing state, Fausto Salinas was also preserving heifers to increase his herd.

In major U.S. livestock regions, some ranchers have slowly begun taking the first steps to boost cattle production after the nation’s inventory shrank due to a years-long drought that dried up pasture land used for grazing and hiked feeding costs.

By the beginning of the year, the herd had dwindled to 86.7 million cattle, the smallest number for the time period since 1951, according to U.S. government data.

When grass failed to grow on pasture land that turned from green to brown and as feed grains became too expensive, ranchers began to ship off more cattle to be slaughtered. Some producers searched miles away for hay to nourish their remaining animals.

The drop in supply drove U.S. food companies to increasingly import beef from other countries, including Australia and Brazil.

Record-breaking cattle prices

Though in its early stages, the herd expansion is now a sign of hope for consumers shelling out for expensive steaks and for meatpackers losing money buying high-priced cattle to slaughter.

“Cattle availability should improve in coming years,” Tyson Foods CEO Donnie King said during an earnings call this week.

Farmers’ cautious plans to rebuild mark a turning point after a continuous downsizing of the herd for six years in a row pushed beef prices to record highs in 2025.

Cattle prices reached records too, slashing the profits of processors like Tyson and providing income for farmers who also grow grains and have struggled to turn a profit from selling crops.

Cattle production is the nation’s most important agricultural industry, according to the U.S. Department of Agriculture, which said the sector consistently accounts for the largest share of total cash receipts for farm commodities.

After delays due to persistent dryness, improved rains are motivating the expansion, along with expectations that cattle prices will remain lofty during the long rebuilding process, ranchers said.

In Nebraska, the second biggest cattle-producing state, the portion of the herd in areas suffering from drought dropped to 19 per cent in late July from 79 per cent two years earlier, according to the U.S. Drought Monitor.

Near Cozad, a city of 4,000 people where Uden works with his son-in-law, rains have not quit since starting around Mother’s Day in May, Uden said. Grass conditions look the best since 2011, he added.

The dramatic improvement comes as a record U.S. corn harvest is expected to boost available feed supplies.

“Everything has kind of fallen into place,” said Uden, 64. “The cattle will have plenty to eat this year.”

Ranches in South Texas also benefited from one of the greenest summers in years, a welcome reprieve after the punishing drought turned forage brown and dry and killed some cattle.

“Right now, we’re in the process of rebuilding,” said Salinas, a rancher in Rio Grande City, Texas, who sold cattle during the drought.

Temporarily tighter supplies

When ranchers retain heifers, beef production temporarily slows because the animals are not being sent to be slaughtered; it will also likely push meat prices even higher before they come down, agricultural economists said.

Consumers have shown resilience to the climbing cost of beef, but increased prices will test demand, they said.

It takes about two years before beef output rises after ranchers make initial moves to expand because that is how long it takes to raise full-grown cattle, ranchers said.

U.S. cattle and beef supplies are set to decline even further after President Donald Trump’s administration halted imports of Mexican livestock in July to keep out New World screwworm, a devastating pest.

U.S. beef imports from Brazil, a key supplier of meat used to make hamburgers, are also expected to fall after Trump imposed a 50 per cent trade tariff on Wednesday.

Meatpackers lose big

Beef producers such as Tyson and Cargill have waited years for ranchers to begin rebuilding herds because companies must increasingly compete with one another to buy limited supplies.

Processors were losing about $300 on each head of cattle they slaughtered on Tuesday, according to livestock marketing advisory service HedgersEdge.com.

Farmers have worried a processor may shutter a beef plant due to hefty losses, though Cargill told Reuters it had no plans to do so.

“It’s not overwhelmingly glaring that, ‘Hey we’re starting to rebuild the cow herd,’ but I think there are quite a few signals,” said Jarrod Gillig, senior vice president of Cargill’s North American beef business.

For one, strong prices for heifers at a major video livestock sale in July signaled the animals will be retained on farms, Gillig said.

In rural feedlots, about 4.2 million heifers were being fattened for slaughter as of July 1, down five per cent from 2024, according to USDA data. The decline likely reflects that ranchers are keeping at least a few more heifers on farms to reproduce, analysts said.

Tyson said a 16 per cent drop in beef cow slaughtering from January to June was another early indicator of ranchers retaining heifers on their farms. The meatpacker reported cattle costs climbed by about $560 million (C$770.4 million) in the quarter that ended on June 28, compared to a year earlier.

Herd rebuilding will begin in earnest next year, and the beef business will see benefits in 2028, King said.

Forgoing immediate profits

Ranchers who retain heifers must make a difficult decision to forgo immediate profits from selling cattle for slaughter in a bet that prices will stay high. Many are cautious about passing up the opportunity because they remember when prices tanked following a rapid production increase in 2014.

High interest rates also discourage farmers from expanding operations.

Hadrick, 49, said he would have liked to hold back more than 16 cows at his farm in Faulkton, South Dakota, but he was spooked by a lack of moisture earlier this year. High cattle prices encouraged him to expand a bit now that his son has returned home from college and provides extra help.

“The market’s screaming for more cattle,” Hadrick said. “We’re dipping our toe in.”

— Additional reporting by Heather Schlitz in Rio Grande City, Texas.

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