Livestock Monitor – 12/5/2025
YEAR-TO-DATE RED MEAT PRODUCTION IS DOWN FOR MAJOR PLAYERS
USDA-NASS released their monthly Livestock Slaughter report on December 1, with the delayed publication backfilling data missed due to the government shutdown. Year-to-date through the end of October, cattle slaughter has fallen -6.7% to 24.9 million head. This marks the third consecutive year of decline, with the reduction in head slaughtered more than twice the magnitude of last year’s decrease (-2.9% from 2023-24) and +2.5% greater than the change from 2022-23 (-4.2%). Throughout 2025, volume losses have been led by steers and heifers, down -596,000 head (-4.7%) and -581,000 head (-7%), respectively. Compared to prior troughs in slaughter around 2015, declines in heifer slaughter remain smaller than those observed then (2013-14: -8.6%; 2014-15: -13.2%). Pullbacks in beef cow and bull slaughter have also been significant this year; beef cow slaughter is down -18.2% year over year to just below 2 million head, while bulls are down -10%. Around the prior trough, beef cow slaughter fell -17.9% from 2013-14 and -14.7% from 2014-15 for the January-October period.
Hog slaughter is also down across the January-to-October window, falling -1.5% to 106.4 million head. Even so, year-to-date levels remain above those observed in 2022 and 2023. Within the mix, barrows and gilts are down -1.4 million head (-1.4%), sows are down -127,000 head (-5.9%), and boars are down 33,000 head (-13.6%) from last year. For the June-to-August period, total sow slaughter fell -5.6% year over year, despite expectations in the USDA-NASS Hogs and Pigs report that farrowing intentions would be down -2% across the September-to-November window; so far, September-to-October sow slaughter is down -2.9%. Should these trends continue, increased sow availability could support higher farrowings and intentions in coming reports.
Dressed weights for cattle and hogs are both up this year on average by +3% and +0.2%, respectively. In both cases, however, these increases have not been substantial enough to offset the losses in slaughter, bringing year-to-date beef and pork production down by -3.9% and -1.3% to 21.7 and 22.8 billion pounds, respectively.
AFRICAN SWINE FEVER HITS SPAIN
A major development has occurred over the last week in global swine production. Spain, one of the top global pork exporters, reported cases of African swine fever (ASF) in wild boars in the Catalonia region near Barcelona. According to the World Organization for Animal Health, this is Spain’s first ASF case since September 30, 1994. In 2024, Spain had the largest swine inventory in the European Union at nearly 34.6 million head and a breeding sow inventory of more than 2.6 million head, according to Eurostat. From January through September this year, Spain’s pork production totaled almost 3.9 million metric tons (MT), up nearly +7% from the same period last year. Spain’s pork exports were near 1.9 million MT through the first three quarters of the year, up about +1% from last year.
China has been a large destination for Spain’s pork exports, which is critical given China is the third largest pork importer globally. As of this writing, China had restricted pork imports from ASF affected regions in Spain. If ASF spreads further from the wild boar population and into Spain’s commercial swine production system, this could lead to further export restrictions from China and other Spanish export destinations. Spain has regionalization agreements with the UK, South Korea, and China, for example, which could allow for some pork exports to occur from Spain. This is a very fluid situation which could have a significant impact on the flow of global pork trade in 2026 and possibly beyond. In the short term, the U.S., as the top global pork exporter, would be well positioned to potentially fill any shortfall in global pork import demand left by Spain.
DAIRY MARKET OUTLOOK FOR EARLY 2026 THREATENED BY BUTTER PRICES
November dairy product price trends were not encouraging for the milk price outlook going into 2026. Wholesale butter prices fell to $1.50 per pound, down $0.12 from the prior month, $0.78 from 90 days earlier, and the lowest monthly average price since February 2021. Forty-pound block cheddar cheese prices were down $0.18 per pound and the lowest price in a year and a half. In the midst of these price declines, non-fat dry milk prices increased by a penny in November.
The performance of butter prices in November kills any optimism of a price rally back towards $2.00 per pound before the end of the year. Until the standard flow of dairy product data from the USDA is resumed, it will be difficult to determine whether this decline is due more to the increase in supply coming from new butter processing plants and an expanding milk cow herd, or to diminished consumer demand. The fourth quarter butter price forecast has dropped to $1.56 per pound based on the November price. This drops the forecast for Class 4 milk prices this quarter to $14.00 per cwt. The October price was $14.30 per cwt, which is down $1.25 from what was expected in late October. Following along, the All Milk price reported by USDA-NASS for the current quarter is projected to be $20.00 per cwt, a downward adjustment of $0.75 from a month ago. The All Milk price for the third quarter is yet to be finalized because the September price has not been released.
The cheese market has followed the forecast script better than the butter market this quarter. Block cheddar cheese prices were expected to average in the mid-$1.60s per pound this quarter, and the November price performed as expected. Market conditions in the butter market are not expected to have a big impact on cheddar cheese prices in the first half of next year. The cheddar cheese price forecast is close to unchanged at around $1.60 per pound. Class 3 milk prices will be more affected as more milk moves toward Italian-type cheese plants instead of being used for butter. The Class 3 milk price forecast has been revised downward $0.75 per cwt in the first two quarters of 2026.
The shock to Class 4 milk prices seen this quarter is expected to persist during the first half of 2026 although prices are forecast to climb back to $17.00 per cwt on average in both Q1 and Q2. The decline in the milk cow herd of 5,000 cows in October is expected to resume in the first six months of next year. Both quarters should see 20,000-head declines in milk cows from the prior quarter. Milk production will still be up from 2025 but will allow for milk and dairy product price stabilization.
Livestock Monitor (pdf)