Animal Production NAICS 112

Feb 23, 2026 - Stable But Firm Feed Costs

• The latest USDA projections show feed costs holding steady as strong export demand and ethanol use keep corn prices slightly above $4.00 per bushel, the Livestock Marketing Information Center reported in February. Corn exports are expected to hit a record 3.3 billion bushels, supported by a weak dollar and a 50% surge in shipments so far this crop year. Despite heavy export and refining demand, USDA still expects 15–20% more corn to flow into livestock and poultry feed channels, with ending stocks projected at 2.127 billion bushels, the largest since 2019. For animal producers, this signals stable but firm feed costs, as opposed to the sharp increases seen in past tight‑supply years, but little relief either. Large inventories help prevent price spikes, yet strong global demand limits downward pressure. Soybean meal is also expected to remain stable at just under $300/ton.
• According to Dairy Herd Management, historically high beef prices continue to play heavily in the dairy market, with high beef prices reshaping herd management decisions across both the beef and dairy cattle sectors. With heifer inventories falling for the eighth straight year and now at their lowest level since 1978, dairy producers are increasingly breeding cows to beef sires to capture record‑high calf values. Crossbred beef‑on‑dairy calves, which sell for up to $1,700 at auction, are providing critical cash flow at a time of weak milk margins, incentivizing producers to delay culling and keep older cows in the milking string. For beef producers, historically tight heifer supplies and delayed dairy culling mean slower rebuilding of the national cattle herd, prolonging the period of constrained feeder and fed‑cattle availability. High beef prices are likely to persist until inventories recover, but rebuilding will take time.

• The FDA’s conditional approval of Merck’s EXZOLT CATTLE‑CA1 provides cattle producers with a critically needed tool to combat New World Screwworm (NWS), a parasite contributing to historically low US herd levels, CNBC reported in December. With the US-Mexico border closed to live‑animal imports due to the NWS outbreak, ranchers have lost access to more than one million calves annually, tightening supply and raising production costs. The topical treatment offers 21 days of protection and also targets fever ticks, helping producers limit losses and avoid further herd decline. However, the drug’s 98‑day meat withholding period and multi‑year timeline for parasite control mean producers will still face elevated biological and financial risk in the near term. As cattle shortages drive plant closures and volatile beef prices, the treatment provides ranchers with a valuable defensive tool, but not an immediate solution to supply pressures or market instability.
• US production of red meat declined again in 2025, according to the December Livestock Slaughter Report from the USDA’s National Agriculture Statistics Service (NASS). Through the end of October, cattle slaughter fell 6.7% to 24.9 million head, marking the third consecutive year of decline, with the reduction in head slaughtered more than twice the magnitude of last year’s decrease. Volume losses in 2025 have been led by steers and heifers, down 4.7% and 7%, respectively. Declines in beef cow and bull slaughter have also been significant, with beef cow slaughter down 18.2% year over year to just below 2 million head, while bulls are down 10%. Record low cattle herd inventories and declining slaughter rates are driving up the price of beef, which is nearly 33% higher than in 2020, according to the Labor Department’s Consumer Price Index.