During the last week of February, Alberta packers were buying fed cattle on a live basis at an average price of $319 per cwt. FOB feedlot in southern Alberta. In Kansas and Texas, live cattle traded as high as US$249 per cwt. during the third week of February before fading down to $244 per cwt. late in the month. The US$249 per cwt. level was a historical high.
Many feedlot operators have contacted me over the past month regarding the price outlook for fed cattle for the spring and summer. During April and May, the break-even fed cattle price for fall-placed yearlings and calves was in the range of $340-350 per cwt. Feeding margins will hover deep in red ink if the fed cattle market doesn’t strengthen by $20-30 per cwt. Negative feeding margins of this calibre would shave $20-30 per cwt. off the feeder market. In this article, I’ll provide a brief overview of the live cattle fundamentals for the second quarter of 2026.
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WHY IT MATTERS: Alberta feedlot break-evens for spring-placed cattle sit at $340-350 per cwt. Whether the market strengthens enough to cover those costs will determine feeding margins across Western Canada through mid-year.
U.S. feedlot placements from July 2025 through December 2025 were 10.6 million head, down 932,000 head from the same period of 2024. Lower feedlot placements will result in lower fed cattle marketings in the second quarter of 2026. According to placement data, market-ready fed cattle supplies made seasonal highs during the first two months of 2026 and will decline each month from March through June.
In the U.S., cattle on feed 180 days or more as of Feb. 1, 2026, were 1.1 million head, up 700,000 head from 12 months earlier. The cattle that have been on feed for 180 days or more are partially offsetting the lower placements from the latter half of 2025. Secondly, U.S. dressed weights during February were up 20 pounds from last year and up 60 lb. from two years ago. The USDA is forecasting second quarter production for 2026 at 6.450 billion lb., about the same as last year.
Western Canada supply picture
In Alberta and Saskatchewan, feedlot placements during the latter half of 2025 were 1.137 million head, down only 45,400 head from the same time frame of 2024. Market-ready fed cattle supplies during the April through June period will be similar to last year.
In Western Canada, it’s important to know how the market-ready fed cattle supply changes. Feedlot placements surge during October and November, and this provides a sharp increase in fed cattle numbers during the summer period.
In Western Canada, dressed weights are also running 20-30 lb. above year-ago levels, so the tightest supply situation in 2026 will be in April. Also in April and the first half of May, the Alberta fed cattle market will function to ration demand by trading at a premium to U.S. prices. The market needs to curb or slow fed cattle exports to the U.S. to satisfy domestic processing requirements.
Demand
Consumer spending at restaurants and grocery stores softened in the final quarter of 2025, and this sluggish economic behaviour continued into January. However, we’re expecting “at home” and “away from home” spending to increase in the second quarter of 2026. We’re forecasting that restaurant sales in Canada and the U.S. during the second quarter will be up six to eight per cent from year-ago levels.
There are three main reasons for the stronger beef demand forecast. First, the U.S. Federal Reserve’s benchmark interest rate is currently at 3.60 per cent, down from the 2023-24 peak of 5.5 per cent. In Canada, the Bank of Canada’s policy rate is at 2.25 per cent, down from the 2023-24 high of five per cent. The lower interest rate environment will stimulate consumer and business spending. Secondly, the U.S. and Canadian government fiscal policies will also contribute to economic growth.
Jerry Klassen
“We’re forecasting that restaurant sales in Canada and the U.S. during the second quarter will be up six to eight per cent from year-ago levels.”
Finally, the “wealth effect” will have a major influence on beef demand in 2026. The “wealth effect” is when business and individuals spend more because the value of their assets (stocks, houses, etc.) increases. Increased household wealth boosts consumer confidence and stimulates economic activity. People will travel and eat out more often.
Price forecast
In conclusion, we’re forecasting higher fed cattle prices in the second quarter of 2026. We believe Alberta fed cattle prices will increase to the range of $335-345 per cwt. during the April to June period. This will be slightly below break even for Alberta feedlots, but at least margins will cover variable costs and a portion of fixed costs. U.S. fed cattle prices in the southern plains are expected to reach up to the range of $255-260 per cwt.
