For Immediate Release: August 19, 2026
Contact: R-CALF USA CEO Bill Bullard
Phone: 406-252-2516; r-calfusa@r-calfusa.com
Please find below R-CALF USA’s weekly opinion/commentary that discusses the anomalous changes that have occurred along the entire beef supply chain over the past 3.5 years. It is in three formats: written, audio and video. Anyone is welcome to use it for broadcasting or reporting.
Domestic Beef Supply Chain on Road to Ruin
Commentary by Bill Bullard, CEO, R-CALF USA
Over the past three years, the quantity of beef produced from domestic cattle decreased year-over-year while domestic beef consumption increased year-over-year. This is Exhibit 1, demonstrating severe market failure in the downstream beef side of the supply chain.
During that same period, the U.S. beef cow inventory declined year-over-year, occurring again at the same time domestic beef consumption was increasing year-over-year. This is Exhibit 2, demonstrating severe market failure in the upstream cattle side of the supply chain.
During that same period, the price of both retail beef and the price of cattle increased year-over-year, again occurring at the same time the U.S. beef cow inventory was declining year-over-year. This is Exhibit 3, demonstrating a severe disconnect between the upstream cattle side and downstream beef side of the supply chain.
Also during that same period, the beef side of the supply chain imported all-time record-high quantities of beef – from both the beef commodity and the beef equivalent of imported cattle, and this again occurred at the same time that both retail beef prices and cattle prices were increasing year-over-year. This is Exhibit 4, demonstrating a severe upending of the economic law of supply and demand (i.e., as beef supplies increased, there should have been a corresponding decrease in retail prices).
And also during that same period, the average monthly retail beef margin increased year-over-year while the average monthly wholesale or beef packer margin decreased year-over-year. This is Exhibit 5, demonstrating that the decades-long, positive relationship between retail margins and wholesale margins has been severed and retailers have been capitalizing on the dysfunctional downstream beef side of the supply chain.
And, finally, for our three-year analysis, the volume in the fed cattle cash market decreased year-over-year, leaving the industry’s critical price-discovery market at an all-time low while the beef packers’ captive supplies reached an all-time high in 2025. This is Exhibit 6, demonstrating that while packing capacity remained unchanged during the previous three years, the beef packers had maximized their control over the available fed cattle supply when we entered 2026.
Let’s recap the anomalies that transpired along the beef supply chain during the three years immediately preceding 2026. For the upstream cattle side of the supply chain, we had rising cattle prices and falling beef cow numbers. On the downstream beef side of the supply chain, we had rising beef consumption, rising beef prices, and falling beef production. From within the downstream beef side of the supply chain, we had historically high import volumes that correlate with rising retail margins and falling beef packer margins. And finally, at the intersect between the upstream cattle industry and downstream beef industry, we have the beef packers maximizing their control over available cattle supplies through record captive-supply arrangements.
Now this year, in 2026, we’re witnessing a radical restructuring where the downstream beef industry intersects with the upstream cattle industry.
The Big Three packers took aggressive action to solidify their control over the available fed cattle supply by shuttering several plants. This will enhance the largest packers’ leverage over cattle prices by enabling them to manage their capacities at levels that do not exceed the available supply of fed cattle. And because the largest packers are retreating from outlying areas, their plants will be anchored where cash markets are exceedingly thin, giving them even more leverage over their predominant captive supplies. These actions will impede domestic herd expansion as it signals to producers that the packers intend to increase their control over cattle supplies.
In addition, we’re witnessing a radical shift on the part of the downstream beef industry as it transitions away from its historical reliance on the upstream domestic cattle industry to meet beef consumption. In the first half of 2026, beef production from domestic cattle continued to decline while imports continued to increase. Imports in the first half of 2026 represented nearly 30% of the beef produced from domestic cattle. America’s dependency on foreign beef has never been greater, and this foreign beef is not only displacing domestic production, but it is also disincentivizing domestic herd expansion.
Record beef imports while beef cow numbers are historically low helps explain why retail margins are increasing while packer margins are decreasing. Sadly, rather than incentivizing the rebuilding of the decimated U.S. cattle herd, the downstream beef industry is instead serving its own self-interests by restructuring and reengineering themselves to maximize their profitability in this new paradigm.
The government needs to intercede before we reach the point of no return. Mandatory country-of-origin labeling is essential. Import controls are desperately needed, and Packers and Stockyards and antitrust enforcers must engage to restore a competitive marketplace for America’s cattle producers.
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R-CALF USA’s weekly opinion/commentary educates and informs both consumers and producers about timely issues important to the U.S. cattle and sheep industries and rural America.
Ranchers Cattlemen Action Legal Fund United Stockgrowers of America (R-CALF USA) is the largest producer-only trade association in the United States. It is a national, nonprofit organization dedicated to ensuring the continued profitability and viability of the U.S. cattle and sheep industries. For more information, visit www.r-calfusa.com or call 406-252-2516.