In mid-September, a group of Black Angus yearling steers off grass averaging 1,000 pounds traded for $465 per hundredweight southeast of Calgary. In central Alberta, Charolais steers off cows weighing 500 lb. sold for $735 per cwt.

There are a number of factors to consider moving forward that will result in lower prices. I’m not saying the market will fall apart, but the factors that contributed to the recent strength are starting to reverse course.

Feedlot operators have experienced a prolonged period of positive margins. Profitability in the finishing sector will likely continue through December. However, during the first quarter of 2026, feedlot margins will move into negative territory and fall further into red ink in the second quarter. Equity erosion in the finishing feedlot sector during the first half of 2026 will result in lower prices for replacement cattle.

The U.S. and Canadian economies will experience softer growth and higher unemployment, which will cause consumer spending to weaken. Wholesale beef prices are expected to trade lower through the remainder of 2025 and the first half of 2026 as beef demand weakens.

U.S. restaurant traffic during summer 2025 was up eight to 10 per cent from levels a year ago, while Canadian restaurant visits were up 20 to 30 per cent. During the first half of 2026, demand for beef will start to ease.

Restaurant traffic in 2026 is expected to be slightly below 2025. The key is that demand is not improving but rather stagnating or decreasing.

We’ve included our GDP projections for the first half of 2026. The U.S. has experienced stellar growth over the past year. U.S. corporate profits have been at record highs, which contributed to the lower unemployment and stronger consumer spending. Wages were rising and jobs were easy to come by. That will change in 2026.

In 2023 and 2024, the U.S. and Canada were contending with a growing job market and wage growth. This situation moderated in 2025. For 2026, job growth will be minimal and wage growth will subside.

The U.S. experienced limited job growth in summer 2025. From January through August, U.S. job growth totalled about 500,000. In Canada, employers shed about 38,000 jobs in the first eight months of 2025. (See the chart on quarterly GDP projections for the latter half of 2025 and the first half of 2026.)

The Federal Reserve Bank of Atlanta’s economic model, GDPNow, pegs third-quarter GDP at 3.3 per cent. Financial industry estimates have U.S fourth-quarter GDP at two per cent, followed by first-quarter growth of only 1.5 per cent. As a rule of thumb, if GDP falls below two per cent the cattle market tends to weaken because consumer spending is not sufficient to sustain beef demand at the current levels.

There are a couple of points to consider involving the monthly chart of the feeder cattle futures from January 2009 to September 2025 I’ve included here. The Great Recession occurred in 2009, and feeder cattle futures traded below $100. The market rallied from 2010 through 2014. GDP topped out in the third quarter of 2014 at five per cent, and the feeder cattle futures peaked that September at $235.

During this five-year period, the market rallied about $140 from the 2009 recessionary low to the September 2014 peak. During 2015, quarterly GDP averaged 1.8 per cent. U.S. beef production was lower in 2015 compared to 2014, but the market did not rally as the consumer pulled the reins.

The COVID-19 recession occurred in 2020, and the feeder cattle market bottomed around $120. The market peaked in early September 2025 around $364. During this five-year period, the market rallied $240. U.S. quarterly beef production in 2026 will be lower than in 2025, but the market will not make fresh highs given our GDP projections for the first half of 2026.

From September 2014 to September 2015, the market dropped about 25 per cent. Using this example, we could see the feeder cattle futures trade in the range of $260 to $280 during September 2026.

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Market-ready supplies of fed cattle were sharply above year-ago levels earlier in winter, but the backlog has slowly been alleviated through the spring period.

The Alberta fed cattle market has been functioning to ration demand by trading at a sharp premium to prices in Kansas and Nebraska.

Despite the higher prices in Alberta, fed cattle exports to the U.S. continue to exceed year-ago levels, thereby further tightening the available supply in Western Canada.

Wholesale beef prices have been percolating higher. Restaurant spending in the U.S. has been running five to six per cent above last year. In Canada, data shows restaurant spending up only 0.5 per cent from year-ago levels.

Feedlot margins in Alberta have been hovering in positive territory during June after significant equity erosion over the winter and spring. Western Canadian feeder cattle prices continue to trade near historical highs.

It appears the U.S. will experience a year-over-year decline in the calf crop for 2024 and 2025. Heifer retention is not sizeable enough to warrant expansion.

On April 1, market-ready fed cattle supplies were at burdensome levels on both sides of the border. U.S. cattle on feed 150 days or longer were up 21 per cent from year-ago levels. In Western Canada, market-ready fed cattle supplies on April 1 were up about 40,000 head from last year. In addition to the larger available numbers, carcass weights were up 20-30 lbs. from last year. U.S. second-quarter beef production is expected to finish at 6.82 billion lbs., up 100 million from the second quarter of 2023. The U.S. April slaughter was up nearly 190,000 head from April 2023 which drained a large portion of the excess supply. In Canada, second-quarter beef output will be similar to last year’s Q2, but keep in mind fed cattle exports have been running 2,000 head per week above last year.

Surprise

As of July 1, the U.S. fed cattle supply and demand balance will be in equilibrium. During August, we’re expecting U.S. market-ready supplies of fed cattle numbers to be in a deficit position relative to the demand projection.

In Canada, fed cattle supplies tightened up in April so that the Alberta market traded at a sharp premium to the U.S. in an effort to curb exports. However, many feedlot operators forward-contracted cattle during the fall of 2023 and this was a surprise to the trade.

Fed cattle supplies in Alberta didn’t seem that tight but analysts and merchants underestimated the amount of cattle that were contracted to U.S. plants. On Aug. 1, market-ready supplies in Alberta are expected to be in a deficit of nearly 30,000 head relative to the demand forecast.

Feedlot placements under 800 lbs. have been sharply below year-ago levels throughout the spring. This trend is expected to continue. Notice U.S. third-quarter beef production will be similar to last year, but fourth-quarter production is expected to be down 227 million lbs. compared to 2023.

Wholesale beef prices have been percolating higher throughout May and June. Prices are expected to peak in July and then start trending lower in August. Similar to last year, packing margins are expected to come under pressure from September through December.

U.S. packers will likely curtail the slaughter pace to keep wholesale prices from dropping significantly.

Restaurant spending trends lower from September through mid-November before picking up for the holiday period. After grilling season wraps up, retail beef demand also softens in the fall period.

Cattle producers in Canada and the U.S. are not rebuilding the herd despite the higher prices. Given the cow slaughter pace and the number of heifers in the slaughter mix, we’re expecting a year-over-year decline in the U.S. and Canadian calf crops in 2024 and 2025. We’re only expecting significant heifer retention in 2025 which would result in a year-over-year increase in the calf crop for 2026.

There have been stronger prices for cow-calf pairs and bred heifers; this largely is a reflection of the current calf market, rather than a sign of herd rebuilding.

For the fall period, yearling heifers around 1,000 lbs. are valued at $300/cwt while yearling steers are quoted in the range of $320-$325/cwt. This will put 500-lb. steer calves at $500-$525/cwt, which is about $40-$60/cwt above current levels.

Conclusions

The fed cattle market will likely peak in late July or early August before trending lower into the fall and early winter. The feeder market will likely make fresh historical highs in August and early September. The feeder market will soften during October and November as the fed market comes under pressure.

For cow-calf producers and backgrounders, make sure you have your price insurance in place. When the market is at historical highs, assess your risk/reward. There is very little upside and significant downside potential.

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In central Alberta, mixed steers weighing just under 900 lbs. sold for $174 while tan mixed fleshier 800-lb. steers sold for $182. In southern Manitoba, larger-frame Charolais blended fleshier steers averaging 800 lbs. sold for $180 while black larger-frame heifers weighing 750 lbs. were valued at $165. Larger-frame Simmental blended buttery steers weighing just over 700 lbs. were valued at $190 in southern Alberta.

Lighter calves were quite variable across the Prairies. Some buyers paid up for grassers under 650 lbs. but this not the norm. There were limited supplies of lighter calves available which may have spurred on the “out of touch” buyer. Cow-calf producers held back on bringing these lighter bawlers to town, given the extremely cold temperatures. Black steers weighing 680 lbs. were valued at $199 in the Lethbridge area. Steers weighing 600 lbs. were regularly quoted from $201 to $210 across the Prairies. There was a small group of Angus larger-frame steers weighing 525 lbs. valued at $233 in southern Manitoba, but order buyers didn’t see too many of these lighter calves in Alberta and Saskatchewan.

Fed cattle supplies are rather snug in the U.S. and the beef complex is heading into a period of seasonal high demand during March. In Alberta, packers have traded this situation to the textbook by consistently booking supplies three to four weeks forward, thereby never being caught short. This divergence in the U.S. and Canadian fed cattle prices will take a couple of weeks to even out. In the meantime, the feeder market will remain quite volatile. U.S. feedlot margins are favourable while Alberta feedlots which sell in the spot market to local packers are struggling.

— Jerry Klassen manages the Canadian office of Swiss-based grain trader GAP SA Grains and Produits Ltd. and is president and founder of Resilient Capital, specializing in proprietary commodity futures trading and market analysis. Jerry consults with feedlots on risk management and writes a weekly cattle market commentary. He can be reached at 204-504-8339.

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Feedlot Alley has received 150-200 per cent of normal precipitation over the past 60 days. Snow and rain, along with extreme cold followed by warmer temperatures, have caused pen conditions to deteriorate. Cattle performance has suffered and the rate of gains is not up to par. Feedlots are struggling to keep cattle dry with straw now trading around $125 per tonne in the Coaldale-Picture Butte area. Needless to say, it’s a difficult situation and there’s no rush to bring in replacements until conditions improve.

In central Alberta, medium- to larger-frame 950-lb. tan mixed steers with medium butter dropped the gavel at $156. (This is down about $40 from the December 2017 highs.) A group of mixed black larger-frame fleshier heifers averaging 920 lbs. sold for $148 in the same region. There were some markets in Alberta that quoted fleshier medium-frame steers weighing 900-925 lbs. at $150-$154. Prices in eastern Saskatchewan and Manitoba were $2-$4 higher than in Alberta but there was minimal support. Prices also failed late in the week.

Calves and cattle fit for grass were down $4-$6 on average from week-ago levels. Given the weaker live cattle futures, feedlot margins could be deep in red ink through the summer. Therefore, ranchers and the small farmer-cattle operator were not willing to take on the risk this week and tied down their bidding hands. Tan steers weighing 575 lbs. traded at $222 in central Alberta while similar Simmental calves averaging 515 lbs. were quoted at $231 in southeastern Saskatchewan.

The barley market was subdued in Saskatchewan but in southern Alberta, offers ranged from $245 to as high as $250 per tonne delivered. Road ban season is underway and difficult off-farm logistics have slowed farmer selling. It’s not only the price, but sellers cannot deliver on time. By the end of the week, feedlots are working down to the last kernel.

— Jerry Klassen manages the Canadian office of Swiss-based grain trader GAP SA Grains and Produits Ltd. and is president and founder of Resilient Capital, specializing in proprietary commodity futures trading and market analysis. Jerry consults with feedlots on risk management and writes a weekly cattle market commentary. He can be reached at 204-504-8339.

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In lighter weight categories, adverse weather contributed to larger discounts on unweaned or semi-weaned calves. Buyers incorporated sharper risk discounts; feedlot operators factored in higher costs per pound gain due to increased death loss. Secondly, if there are two or three sick ones in a bunch, buyers assumed there’ll be a few more. Winter-type conditions appeared to be a lead weight on the market, although moderate to strong demand was noted across the Prairies.

Eastern Saskatchewan was once again a hot pocket although the premium over Alberta markets eroded. Smaller groups of feather-light large-frame steers weighing just over 400 lbs. were trading from $270 to as high as $280. Medium- to larger-frame tan steer calves averaging 525 to 540 lbs. were trading from $245 to $252. A small group of larger-frame Charolais heifers averaging 520 lbs. were quoted at $209 in the same region.

Larger-frame fleshier Simmental-cross steers averaging around 820 lbs. were quoted at $203 in southern Alberta while 810-lb. fleshier red heifers sold for $193 in the same area. Yearling supplies are rather snug at this time of year but there is a fair amount of optimism for fed cattle prices in the March-April timeframe. Over the next couple of months, U.S. weekly beef production is expected to decline. At the same time, record-high consumer confidence is confirming that demand will continue to run three to five per cent above year-ago levels. Feedlot margins are expected to move into positive territory in the first quarter, which should spill over into the feeder complex.

— Jerry Klassen manages the Canadian office of Swiss-based grain trader GAP SA Grains and Produits Ltd. and is president and founder of Resilient Capital, specializing in proprietary commodity futures trading and market analysis. Jerry consults with feedlots on risk management and writes a weekly cattle market commentary. He can be reached at 204-504-8339.

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Although feedlot inventories decline in the summer, many operations want to carry sufficient numbers into the fall. At this time of year, there’s not many cattle available so the few buyers stepping forward are sufficient to support the overall price structure. Keep in mind, we’ve seen significant equity recovery in the feedlot sector over the past six months.

In northern Alberta, a small group of mixed steers weighing just under 700 lbs. traded for $225. In southern Alberta, mixed steers in the range of 525 to 560 lbs. were quoted from $240 to $246. Mixed heifers averaging around 530 lbs. were quoted at $228 in the same region.

Canadian feedlot operators were also watching prices south of the border, where feeder cattle prices have been rather resilient. The U.S. Department of Agriculture reported that 736-lb. yearling steers traded for US$171 at Valentine, Nebraska.

Barley prices have rallied approximately $30-$40 per tonne over the past week, which has caught many feedlot operators off guard. Alberta fed cattle prices were reported from $144 to $146 this week, down from $171 in early June. The Canadian dollar has strengthened to US77.75 cents.

Feedlot margins remain in positive territory, but we could see deterioration later in fall, which would set a negative tone for the feeder market.

— Jerry Klassen manages the Canadian office of Swiss-based grain trader GAP SA Grains and Produits Ltd. and is president and founder of Resilient Capital, specializing in proprietary commodity futures trading and market analysis. Jerry consults with feedlots on risk management and writes a weekly cattle market commentary. He can be reached at 204-504-8339.

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It’s that time of year, when stragglers and recovering sick animals come available and discounts were quite sizeable on substandard cattle. Quality late bloomers were well bid and there was no shortage of buyers. Feedlot margins have eroded from the record highs earlier in May but remain in positive territory. In southern Alberta, a small group of larger-frame medium-flesh steers averaging around 600 lbs. traded at $240, while 750-lb. steers of similar quality sold for $210. Fortuitous price action was noted across the Prairies, which can occur in a low volume environment. A small group of RMX steers weighing just under 800 lbs. reached up to $219 in central Alberta while mixed steers with no special features, averaging 850 lbs., were quoted at $196 in eastern Saskatchewan.

Calves and mid-weight feeder cattle held value with steady demand noted from feedlot operators and farmers, who were shopping for grassers. Pasture conditions are optimal and there is no shortage of feed. Feeder cattle futures were under pressure but this didn’t temper buying enthusiasm. Cattle producers have basked in the sunshine these past few months and it takes time to change a season. A small group of mixed heifers averaging 660 lbs. was quoted at $210 in Manitoba; steers averaging just over 600 lbs. sold for $240 in the same region.

Alberta packers were buying fed cattle in the range of $159-$163 this past week, which is approximately $20 above breakeven pen closeout values. However, looking forward four to six months, the current price of feeder cattle will cause margins to hover around breakeven. This will likely halt upside potential but the market appears well supported in the short term.

— Jerry Klassen manages the Canadian office of Swiss-based grain trader GAP SA Grains and Produits Ltd. and is president and founder of Resilient Capital, specializing in proprietary commodity futures trading and market analysis. Jerry consults with feedlots on risk management and writes a weekly cattle market commentary. He can be reached at 204-504-8339.

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This weaker live cattle trade appeared to pull the reins on the feeder cattle market, although feedlot operators continued to send “just get ’em” orders to buyers across the Prairies. Southern Alberta markets appeared to hold a premium over other regions of Western Canada but late in the week, the arbitrage opportunities were evaporating, with strong gains noted in the non-major feeding regions.

Feeder cattle supplies are dwindling this time of year, and buyers had to pay up for quality groups of yearlings in all markets. Heavier calves also surged higher as buyers looked to these groups as the second option. The farmer/cattle producer shopping for grassers had no chance with feedlot margins near record highs; the buying power was overwhelming. Cow-calf operators moving cattle this week walked away shaking their heads in unbelief how markets can change in such a short period of time.

In central Alberta, mixed steers with no special feature just over 650 lbs. reached up to $245; however, in the same region, larger-frame steers just over 600 lbs. traded in the range of $260-$265. Mixed heifers in the same region around 625 lbs. were trading from $215 to as high as $222. Larger-frame Charolais-cross medium-flesh steers just averaging 810 lbs. were quoted at $219 landed in southern Alberta; Simmental-cross heifers averaging 830 lbs. were quoted at $194 in the same region. In west-central Saskatchewan, a small group of 950-lb. steers were quoted at $182.

Feedlot operators have a higher risk tolerance now that margins have been healthy for an extended period of time. Even if fed cattle markets decline, the feeder markets have potential to ratchet higher over the next couple weeks. Feedlots will continue to scramble for available quality cattle. Weekly U.S. beef production is coming in lower than anticipated as marketing weights continue to decline. Adverse feedlot conditions due to excessive moisture continue to wreak havoc on feedlot efficiencies in the U.S. southern Plains and parts of the Midwest. Choice wholesale beef prices closed the week at US$247/cwt and are nearing the 2015 highs.

— Jerry Klassen manages the Canadian office of Swiss-based grain trader GAP SA Grains and Produits Ltd. and is president and founder of Resilient Capital, specializing in proprietary commodity futures trading and market analysis. Jerry consults with feedlots on risk management and writes a weekly cattle market commentary. He can be reached at 204-504-8339.

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Financial risk is definitely higher this year, with growing beef production and sharp increases in pork and poultry supplies. Market chatter this week appeared to notice the outside world and these feeder cattle will eventually end up on plate of a budget-constrained consumer, complaining about food inflation.

The deteriorating Canadian dollar had little effect on feeder prices. U.S. feedlot margins are in a devastating position which resulted in limited orders from south of the border. Therefore, Alberta feedlots set the price structure across the Prairies. Certain operations were noticeably absent this week, anticipating better quality and lower prices later in fall. Until feedlots see some change in the overall market environment, there is no need to be anxious this early in the season.

Heavier yearlings once again led the market lower, trading down $3-$7 from last week. However, cattle in the range of 750 to 850 lbs. were steady to marginally weaker; mixed steers in central Alberta weighing 830 lbs. sold for $267 while 870-lb. mixed heifers traded at $241 at the same sale. Feature groups of feeders with efficient feeding potential held value with week-ago levels, but this was rare. Feeder markets were down $4 to as much as $10 late in the week as the futures market eroded.

Calf prices were quite variable across Western Canada but were mostly $4-$8 lower from last week. Alberta has less forage and silage available compared to past years; therefore, larger feedlot operations outside the irrigation regions appear to be shying away on calves. Backgrounding operaters are in the final stages of the grain harvest, so these buyers were also absent. Finally, calves have significant risk because there are ideas yearlings will be $15-$20 cheaper next spring, given the sharp year-over-year increase in second-quarter beef production.

— Jerry Klassen is manager of the Canadian office for Swiss-based grain trader GAP SA Grains and Produits. He is also president and founder of Resilient Capital, which specializes in proprietary commodity futures trading and commodity market analysis. Jerry owns farmland in Manitoba and Saskatchewan but grew up on a mixed farm/feedlot operation in southern Alberta, which keeps him close to the grassroots level of grain and cattle production. Jerry is a graduate of the University of Alberta. He can be reached at 204-504-8339.

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