Profit Margins for U.S. Meat Processors Improve as Cattle-Cycle Crisis Eases
Key Facts
That marks the highest margin since the third quarter of 2024, signaling improved processing conditions after a period of pressure on the sector. The signal comes as U.S. cattle numbers remain low, limiting the supply available to slaughterhouses. At the same time, trade measures and the reopening of border crossings offer scope for imports to increase, though their effect on supplies depends on flows gradually returning. The sector is therefore seeing improving margins alongside continued tight supply, while official forecasts point to a slow pace of slaughter through 2027.
U.S. Department of Agriculture data show that total cattle and calves on farms stood at 94.2 million head on July 1, 2026. Beef cows numbered 28.5 million head, down 1% from the same date a year earlier. The department also estimated the 2026 U.S. calf crop at 32.5 million head, a 2% decline from 2025. This decline leaves a limited base for efforts to rebuild the herd, while the volume of supply available for slaughter depends on new animals entering the production cycle. In its forecasts published in October, the department said the slow pace of slaughter was expected to continue through 2027. It added that this outlook held even after it raised its cattle import forecasts following the reopening of two border crossings.
Supply constraints are also linked to cattle flows from Mexico, whose border crossings have gradually reopened after concerns related to New World screwworm. An agricultural economist said it would take months for Mexican cattle imports to return to normal levels. The Associated Press estimated normal Mexican supplies at about 1.1 million head a year, or nearly 3% of U.S. cattle supplies historically. President Donald Trump's administration allowed imports of up to 300,000 metric tons of ground beef without tariffs for 90 days. The measure is intended to increase meat availability, but it concerns ground beef imports, while restoring the flow of live cattle takes longer. As a result, the timing of the measures' effects on processors varies between increased imports of finished products and the gradual recovery of animal supplies.
The pressure from cattle shortages remains visible in retail prices: the average price of a pound of ground beef rose from $4.39 in July 2021 to $6.89 in July 2026. The Associated Press said the increase over that period was nearly 57%, while the year-over-year price increase reached 10% in July 2026. These figures reflect the continued rise in meat costs for consumers alongside declines in beef cow numbers and the calf crop. In its meat production estimates, the U.S. Department of Agriculture cut its 2027 forecast by 160 million pounds from the previous month's estimate, to 24.675 billion pounds. It estimated 2026 production at 24.802 billion pounds, after a slight reduction from its previous estimate. The forecasts keep production in both years at similar levels, with a slight decline expected in 2027.
JBS's results offer another indication of the trajectory of its U.S. beef business among major processors. Wesley Batista Filho, who oversees the company's U.S. operations, said 2027 "should be a much better year for the U.S. compared with 2026." He linked the expected improvement in part to a recovery in cattle imports from Mexico to about 1 million head a year. That outlook makes the return of cross-border supplies a pivotal factor in the sector's estimates for next year. It is also consistent with the Agriculture Department's forecast that the pace of slaughter will remain slow through 2027, highlighting that supply improvement may be gradual. Klein's indication that the worst phase of the cycle is over comes as herd figures and projected production still point to limited supply.