Cattle supply crisis already impacts US meatpacking industries

The combination of a shortage of animals for slaughter and soaring beef prices has led large slaughterhouses to review operations and close units in different regions of the United States.

JBS USA closed, in June 2026, the activities of its beef processing plant in Souderton, Pennsylvania, a unit with capacity to process around 2 thousand heads per day.

In the same period, the company also closed its plant in Memphis, Tennessee, a factory dedicated to the production of processed foods that employed approximately 200 workers.

In 2025, the company had already closed Swift Beef Company, in Riverside, California, a unit dedicated to preparing and packaging beef for supermarkets, with an impact of 374 jobs.

Tyson Foods also made important adjustments. In January 2026, the company announced the closure of its beef packing plant in Lexington, Nebraska. The unit had the capacity to process around 5,000 cattle per day, equivalent to almost 5% of all daily slaughter carried out in the United States.

In addition, the company reduced operations at the Amarillo, Texas, plant, which began operating with just one work shift, affecting around 1,700 employees.

Another company impacted by the scenario was Cargill, which closed a ground beef processing unit in Milwaukee, Wisconsin in May 2026. The closure affected approximately 221 workers and reinforced the industry's adjustment movement in the face of reduced availability of raw materials.

Only the closures of the JBS plants in Souderton and Tyson in Lexington removed a capacity estimated at around 7,000 heads of cattle per day from the market.

For comparison purposes, the United States currently slaughters between 120,000 and 125,000 cattle daily, according to data provided by the American consultancy DTN.

This means that the recent closures represent a reduction of approximately 5% to 6% in national beef processing capacity, highlighting the impacts of the reduced supply of animals on the country's entire production chain.

Data from the USDA (United States Department of Agriculture) show that the total herd of cattle and calves totaled 86.2 million heads at the beginning of January 2026, compared to 86.5 million in the same period of the previous year.

Although the annual decline was just 0.3%, the figure represents the lowest North American cattle inventory in 75 years.

The situation is even more worrying when looking at the herd of beef cows, responsible for producing calves. The herd fell to 27.6 million heads, a drop of 1% compared to the previous year and the lowest level since the beginning of the 1950s. The total number of calves is estimated at 32.9 million, a drop of 2% compared to the previous year and the lowest volume recorded since 1941.

The result is a reflection of consecutive years of drought in important livestock regions, high feed costs and the liquidation of sows promoted by livestock farmers during the most critical periods of the climate crisis.

Although some indicators point to the beginning of a herd recovery, analysts estimate that the recovery will be slow and could take several cycles.

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Prices and Costs

The shortage of cattle in the United States has increased the cost of the meatpacking industry's main raw material. According to USDA projections, the average price of cattle finished for slaughter, known as fed steer, is expected to reach US$235.75 per 100 pounds of live weight in 2026, setting a new record for the North American market.

The progress is significant when compared to previous years. In 2025, the average price of the animal was close to US$213 per 100 pounds of live weight, which means an increase of approximately 10.7% in just one year. If compared to the 2024 average, estimated at around US$187 per 100 pounds of live weight, the accumulated appreciation reaches approximately 26% in two years.

In practice, considering a finished animal weighing around 1,400 pounds, equivalent to 635 kilos, the acquisition cost for slaughterhouses went from approximately US$2,620 per head in 2024 to around US$2,980 in 2025, now reaching values close to US$3,300 per animal in 2026. This is an increase of more than US$680 per head in just two years.

The impact on the industry is significant because the value of the animal represents between 80% and 90% of the operating costs of a beef slaughterhouse. With fewer animals available on the market, companies need to compete for the purchase of lots, further increasing the prices paid to livestock farmers.

Consumption

The smallest supply of cattle has ever reached the pockets of the American consumer. According to data from the USDA, the average price of fresh beef reached US$9.64 per pound in April 2026, an increase of approximately 13% compared to the same period of the previous year. Steaks reached US$ 12.80 per pound, one of the highest levels ever recorded in the country.

Ground beef, considered one of the main items in the food basket of American families, also broke a record. Data from the Bureau of Labor Statistics show that the average price of ground beef reached US$7.06 per pound in May, an increase of 13.1% compared to May 2025. Compared to 2020, the accumulated appreciation reaches around 58%.

The increase in beef protein occurs in a context of persistent inflation in the United States. In May, the consumer price index accumulated an annual increase of 4.2%, while food continued to be among the items that put the most pressure on family budgets.

Health issues

In addition to the economic difficulties caused by the shortage of cattle, North American livestock farming began to deal with a new health threat. The concern involves the New World blow fly, a parasite considered one of the most destructive to livestock production in the Americas.

In May of this year, the USDA temporarily suspended the import of cattle, horses and bison from Mexico after confirming new outbreaks of the disease in regions closer to the North American border.

The sector's concern is that a possible spread of the pest in North American territory will further increase production costs precisely at a time when livestock farmers are in short supply of animals. In addition to direct losses to animals, an outbreak could require additional investments in surveillance, health control, veterinary treatments and restrictions on animal movement.

USDA experts assess that the reintroduction of the blowfly would represent a significant risk for a livestock chain that generates more than US$100 billion per year in the United States.

To prevent the entry of the plague, the United States expanded monitoring actions in border regions and reinforced cooperation with Mexico and Central American countries. The strategy follows the model used in past decades, based on permanent monitoring and the release of sterile insects to interrupt the fly's reproductive cycle.

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Source: CNN