Daily Market Highlights

Cattle futures broke higher Friday buoyed by stronger negotiated cash fed cattle prices and a boost in wholesale beef values.

Live Cattle futures closed an average $3.58 higher. Feeder Cattle futures closed an average of $7.91 higher. Week to week on Friday, Live Cattle futures closed an average of $6.63 higher, and Feeder Cattle futures closed an average of $12.63 higher ($9.92 higher at the front to $13.98 higher at the back).

Negotiated cash fed cattle trade was limited on moderate demand in Kansas through Friday afternoon, according to the Agricultural Marketing Service. Although too few transactions to trend, there were some FOB live trades at $232/cwt.; price the previous week was $229.

Trade was light to moderate on moderate demand in the North. Based on the latest established trade, FOB live prices were $2 higher in Nebraska at $232 and steady to $2 higher in the western Corn Belt at $230-$232. Dressed delivered prices were $360, which was $4 higher in Nebraska and steady to $4 higher in the western Corn Belt.

Choice boxed beef cutout value was $2.52 higher Friday afternoon at $349.97/cwt. Select was $4.54 higher at $346.92. Week to week on Friday, Choice was $1.24 lower, but Select was $3.12 higher.

The grain complex continued lower on Friday, pressured by technical selling and favorable South American weather.

Soybean futures closed fractionally lower to 2¢ lower through Aug ’27. Corn futures closed 1¢ to 2¢ lower. KC HRW Wheat futures closed unchanged to fractionally mixed.

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Major U.S. financial indices closed mixed on Friday.

The Dow Jones Industrial Average closed 319 points higher. The S&P 500 closed 12 points higher, but the NASDAQ was down 6 points.

West Texas Intermediate Crude Oil futures (CME) closed 1¢ to 10¢ lower through the front six contracts.

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As the new year gets underway, here’s some perspective on cattle prices year over year the last week of December:

• The weekly weighted average five-area direct FOB live fed steer price was $30.92 more (15.6%) year over year at $229.33/cwt. The weekly weighted average dressed delivered fed steer price was $49.48 more (16.1%) at $356.53. The CME Feeder Cattle Index was $87.60 (33.6%) higher at $348.65.
• Prices for Medium and Large #1 feeder steers weighing 600-700 lbs. were significantly higher, based on USDA’s weekly stocker summary. The average price the last week of December was $108.98 higher in the North Central region at $413/cwt., $107.77 higher in the South Central region at $392.28 and $94.77 higher in the Southeast at $363.32. That represented an increase of 35-38%.
• Although wholesale beef values never found seasonal holiday spark, Choice boxed beef cutout value was $36.54 higher (11.4%) year over year at $356.12/cwt., while Select was $58.58 higher (20.3%) at $347.46. The Choice-Select spread was $8.66, which was $22.04 less (-71.8%).
• Retail beef prices continued to surge higher. Based on November data — the most recent available data from USDA — Choice retail value was $1.76 higher (21.2%) year over year at $10.08 per pound. The all fresh retail beef value was $1.34 higher (16.6%) at $9.40.
• Along with extraordinary consumer beef demand, declining cattle numbers and beef production explain the price increases. Year to date, through Dec. 26, estimated total cattle slaughter of 28.9 million head was 2.1 million head fewer (-6.8%) less. Estimated total beef production of 25.3 billion pounds was 1.1 billion pounds less (-4.0%).

Cattle futures continued higher Wednesday amid light holiday-trade.

Toward the close, Live Cattle futures were an average $1.07 higher. Feeder Cattle futures were an average of $1.02 higher.

Negotiated cash fed cattle trade was inactive on moderate demand in all major cattle feeding regions through Wednesday afternoon, according to the Agricultural Marketing Service.

Last week, FOB live prices were $229/cwt. in Kansas, $230 in Nebraska and $228-$230 in the western Corn Belt.

Dressed delivered prices were mostly $356 in Nebraska and $356-$358 in the western Corn.  

Choice boxed beef cutout value was 75¢ lower Wednesday afternoon at $347.45/cwt. Select was 78¢ lower at $342.38.

The grain complex continued mainly lower on Wednesday, led by Soybeans.

Toward the close, through near Jly contracts, Soybean futures were 11¢ to 15¢ lower on expectations of a bumper crop in Brazil and continued wonderment about the trade deal with China.

Corn futures were fractionally higher. KC HRW Wheat futures 6¢ to 7¢ lower.

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Major U.S. financial indices closed lower Wednesday on likely year-end profit taking and positioning.

The Dow Jones Industrial Average closed 303 points lower. The S&P 500 closed 50 points lower, and the NASDAQ was down 177 points.

Through mid-afternoon, West Texas Intermediate Crude Oil futures (CME) were 48¢ to 54¢ lower through the front six contracts.

Cattle futures gained on Tuesday, led once again by Feeder Cattle.

Toward the close, Live Cattle futures were an average $1.73 higher. Feeder Cattle futures were an average of $2.88 higher.

Negotiated cash fed cattle trade was inactive on light demand in all major cattle feeding regions through Tuesday afternoon, according to the Agricultural Marketing Service.

Last week, FOB live prices were $229/cwt. in Kansas, $230 in Nebraska and $228-$230 in the western Corn Belt.

Dressed delivered prices were mostly $356 in Nebraska and $356-$358 in the western Corn. 

Choice boxed beef cutout value was $1.13 lower Tuesday afternoon at $348.20/cwt. Select was $2.46 lower at $343.16.

Grain and Soybean futures continued lower on Tuesday with the positive outlook for a bumper crop in Brazil and year-end positioning.

Toward the close, through near Jly contracts, Corn futures were 1¢ to 2¢ lower. KC HRW Wheat futures were 6¢ lower. Soybean futures were 2¢ to 5¢ lower.

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Major U.S. financial indices edged lower Tuesday.

The Dow Jones Industrial Average closed 94 points lower. The S&P 500 closed 9 points lower, and the NASDAQ was down 55 points.

Through mid-afternoon, West Texas Intermediate Crude Oil futures (CME) were 6¢ to 13¢ lower through the front six contracts.

Cattle futures were mainly higher Monday, led by Feeder Cattle.

Toward the close, Live Cattle futures were an average 47¢ higher, except for an average of 43¢ lower in the front three contracts.

Feeder Cattle futures were an average of $1.07 higher (47¢ higher at the back to $1.55 higher near the front).

Negotiated cash fed cattle trade was inactive on light demand in all major cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service.

Last week, FOB live prices were steady to $1 higher in Kansas at $229, $2 higher in Nebraska at $230 and steady to $2 higher in the western Corn Belt at $228-$230.

Dressed delivered prices were mostly steady to $2 lower in Nebraska at mainly $356 and steady to $2 higher in the western Corn Belt at $356-$360 on a light test.  

The weekly weighted average five-area direct FOB live fed steer price was $1.36 higher at $229.33/cwt. The weekly weighted average dressed delivered fed steer price was 59¢ lower at $356.53.

Choice boxed beef cutout value was $1.88 lower Monday afternoon at $349.33/cwt. Select was $1.82 higher at $345.62.

Grain and Soybean futures were lower on Monday with little news, other than reportedly positive progress in resolving the Ukraine-Russia fighting and South America’s looming harvest.

Toward the close, through near Jly contracts, Corn futures were 7¢ lower. KC HRW Wheat futures were 5¢ to 6¢ lower. Soybean futures were mostly 7¢ to 9¢ lower.

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Major U.S. financial indices closed lower Monday on likely year-end profit taking.

The Dow Jones Industrial Average closed 209 points lower. The S&P 500 closed 24 points lower, and the NASDAQ was down 118 points.

Through mid-afternoon, West Texas Intermediate Crude Oil futures (CME) were 99¢ to $1.09 higher through the front six contracts.

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Despite extraordinary volatility in the fourth quarter, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University points out prices recovered from the steep sell-off and are ending  the year higher for the third consecutive time.

Peel provides some of his expectations for 2026, in his weekly market comments:

Higher feeder and fed cattle prices“Seven years of declining calf crops, culminating in the 2025 calf crop at the lowest level since 1941, and limited signs of heifer retention mean the feeder cattle supplies will be tighter going into 2026 and may tighten even more during the year if heifer retention picks up,” Peel says.

Prices advancing more slowly“Feeder and fed cattle prices, though expected to increase, are likely to increase relatively less in 2026 compared to 2025,” Peel says. “In 2025, feeder cattle prices increased roughly 25-35%, while fed cattle prices increased 15-20%. Both feeder and fed prices are likely to see prices increase in the range of 5-15% in 2026.”

Continued volatility“Unfortunately, volatility is likely to continue to be a risk for cattle producers,” Peel says. “The big fourth quarter 2025 correction should remove the tendency for a market or technical correction for quite some time, but external sources of uncertainty are likely to continue injecting volatility into cattle markets going forward. With cattle and beef markets continuing to be a focus of political scrutiny, markets are subject to additional political rhetoric and meddling.”

Cattle futures closed mainly higher Friday, supported by firm negotiated cash fed cattle prices.

Live Cattle futures  closed an average of $1.06 higher. Feeder Cattle futures closed narrowly mixed, from an average of $1.54 higher.

Week to week on Friday, Feeder Cattle futures closed an average of $1.95 higher. Live Cattle futures closed an average of 64¢ higher, except for an average of 67¢ lower in the front three contracts.

Negotiated cash fed cattle trade was mostly inactive on moderate demand through Friday afternoon, according to the Agricultural Marketing Service.

For the week, FOB live prices are steady to $1 higher in Kansas at $229/cwt., $2 higher in Nebraska at $230, and $1 higher in the western Corn Belt at $229.

Dressed delivered prices were steady to $2 lower in Nebraska at $356. Dressed delivered prices in the western Corn Belt the previous week were $356-$358.

Choice boxed beef cutout value was $3.41 lower Friday afternoon at $351.21/cwt. Select was $1.95 lower at $343.80.

Estimated total cattle slaughter for the holiday-shortened week of 429,000 head was 158,000 head fewer than the previous week and 4,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 28.9 million head was 2.1. million head fewer (-6.8%) than the same time last year. Estimated year-to-date beef production of 25.3 billion pounds was 1.1 billion pounds less (-4.0%).

Grain and Soybean futures were mixed on Friday.

Corn futures closed fractionally lower to 1¢ lower in the front three contracts and then mostly fractionally higher.

KC HRW Wheat futures closedmostly unchanged to fractionally higher.

Soybean futures closed mostly 2¢ to 4¢ lower.

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Major U.S. financial closed little changed on Friday.

The Dow Jones Industrial Average closed down 20 points. The S&P 500 closed 2 points lower, and the NASDAQ closed 20 points lower.

West Texas Intermediate Crude Oil futures (CME) closed $1.41 to $1.61 lower through the front six contracts.

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Beef packing capacity utilization will continue to be less than historical norms, despite Tyson closing its plant at Lexington, Neb., and halving production at its Amarillo, Texas facility, according to Terrain’s recent outlook for the first quarter of 2026.

Terrain estimates the Tyson transitions will eventually reduce U.S. slaughter capacity by about 6.6%.

“However, slaughter plant capacity utilization is still nearly 6% behind historical norms, as the number of cattle is still well short of filling available slaughter capacity,” explains Dave Weaber, Terrain senior animal protein analyst. “I expect utilization to decline by about 2% during 2026 when two new plants in Nebraska and Missouri complete their startups. A proposed plant in the Panhandle of Texas that would handle 6,000 head per day has the potential to lower utilization rates back to early-2025 levels if completed. Even without additional future slaughter capacity, utilization rates will remain low; fed cattle numbers are expected to decline during the next two to three years because of cow-calf producers’ beef cow herd expansion efforts.”

In the meantime, Weaber says reduced fed slaughter packing capacity will help the remaining plants run more volume, improving efficiency by spreading fixed and semi-variable costs across more head and pounds of beef. He explains increased operational efficiency will likely encourage plants to fill available capacity and compete more for the available cattle.

“Even with a 2% shift in leverage (fed cattle price to comprehensive cutout) to the packers’ favor, I expect the choice cutout to average between $375/cwt. and $385/cwt., and fed cattle prices to average between $234/cwt. and $238/cwt. in the first quarter,” Weaber says.

Cattle futures sputtered during Wednesday’s holiday-shortened session.

Toward the close, Live Cattle futures were an average of 75¢ lower.

Feeder Cattle futures were narrowly mixed, from an average of 26¢ lower in five contracts to an average of 32¢ higher.

Negotiated cash fed cattle trade ranged from moderate on moderate demand in Nebraska to limited on light to moderate demand in the western Corn Belt to mostly inactive on moderate demand in Kansas through Wednesday afternoon, according to the Agricultural Marketing Service.

So far this week, FOB live prices are steady to $1 higher in Kansas at $229 and $2 higher in Nebraska at $230, where dressed delivered prices are steady at $356-$358.

Last week, FOB live prices in the western Corn Belt were $228 and dressed delivered prices were $356-$358.

Choice boxed beef cutout value was $1.15 lower Wednesday afternoon at $354.62/cwt. Select was $3.84 lower at $345.75.

Grain and Soybean futures were higher Wednesday with likely technical buying.

Toward the close, through near Jly contracts, Corn futures were 2¢ to 3¢ higher. KC HRW Wheat futures were 6¢ higher. Soybean futures were 11¢ to 12¢ higher.

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Major U.S. financial indices closed higher Wednesday, extending gains from the previous session.

The Dow Jones Industrial Average was up 288 points. The S&P 500 closed 22 points higher, and the NASDAQ closed 51 points higher.

Through mid-afternoon, West Texas Intermediate Crude Oil futures (CME) were 2¢ to 7¢ higher through the front six contracts.

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Creighton University’s Rural Mainstreet Index (RMI) edged above growth neutral this month for only the second time this year.

The overall index rose 6 points month to month to 50.1, the highest since last July. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral. It is based on a monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

“Weak agriculture commodity prices and high input costs for grain producers continue to restrain economic activity in the 10-state region,” says Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

When asked to identify the most effective policy changes to boost farm income, half of the bank CEOs named the reduction of farm tariffs and trade restrictions as the most effective or useful.

“Tariffs continue to be a negative factor for the farming sector,” says Jeffrey Gerhart, former Chairman of the Independent Community Bankers Association. “We’ve worked hard to build good trading relationships with our trading partners across the globe, only to see it torn apart in less than 12 months.”

Rural bankers remain pessimistic about economic growth for their area over the next six months, although the December confidence index rose to 40.9, its highest reading since January of this year.

Cattle futures were lower Tuesday with profit taking and floundering wholesale beef values.

Toward the close, Live Cattle futures were an average of $1.03 lower (7¢ lower toward the back to $2.22 lower at the front), except for 10¢ higher in the back contract.

Feeder Cattle futures were an average of $1.48 lower.

Negotiated cash fed cattle trade was light on moderate to good demand in Kansas through Tuesday afternoon, according to the Agricultural Marketing Service. FOB live prices were steady to $1 higher at $229/cwt.

Trade was limited on light to moderate demand in Nebraska and the western Corn Belt. Although too few to trend, there were some dressed delivered trades in Nebraska at $356 and some FOB live trades in the western Corn Belt at $229. Last week, FOB live prices were $228-$229 in both regions. Dressed delivered prices were $356-$358.

Choice boxed beef cutout value was $7.10 lower Tuesday afternoon at $355.77/cwt. Select was $1.10 lower at $349.59. The Choice-Select spread of $6.18 was the lowest since May of 2024.

Grain futures were higher Tuesday.

Toward the close, through near Jly, KC HRW Wheat futures were 5¢ to 7¢ higher with some likely risk premium added for the Ukraine-Russia war.

Corn futures were fractionally higher.

Soybean futures were 1¢ to 2¢ lower.

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Major U.S. financial indices closed higher Tuesday, led by tech stocks and supported by stronger domestic economic growth than anticipated.

Real gross domestic product (GDP) increased at an annual rate of 4.3% in the third quarter of 2025, according to the initial estimate released by the U.S. Bureau of Economic Analysis. In the second quarter, real GDP increased 3.8%.

The Dow Jones Industrial Average was up 79 points. The S&P 500 closed 31 points higher, and the NASDAQ closed 133 points higher.

Through mid-afternoon, West Texas Intermediate Crude Oil futures (CME) were 28¢ to 46¢ higher through the front six contracts.

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Projected cattle feeding returns remain significantly positive through the first half of next year, based on the latest Historical and Projected Kansas Feedlot Net Returns. Keep in mind, these estimates are based on cash and assume no price risk management.

For instance, projected net returns for steers range from $500.25 per head this month to $221.79 in May, with a cost of feedlot gain increasing from $93.03/cwt. this month to $102.21 in May. Similarly, projected net returns for heifers range from $547.31 per head this month to $288.23 in May with a feedlot cost of gain growing from $99.77/cwt. this month to $109.66 in May.

Estimated returns decline progressively through May, primarily due to increasing feeder cattle prices. Then net returns turn negative.

Projected returns range from -$243.03 per head in June to -220.82 in August. Feeder cattle prices for those months are $334.84/cwt. and $325.42, respectively. By way of comparison, feeder steer prices before then ranged from $263.23 for cattle finished this month to $286.69 for those that will finish in May. Feedlot cost of gain for steers runs from $102.90/cwt. to $104.13 from June through August.

Cattle futures extended gains Monday, supported by Friday’s friendly Cattle on Feed report (see below).

Toward the close, Live Cattle futures were an average of 91¢ higher. Feeder Cattle futures were an average of $2.13 higher.

Negotiated cash fed cattle trade was mostly inactive on light demand in all cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service.

Last week, FOB live prices were $1-$2 lower in Kansas at $228-$229/cwt. and unevenly steady in Nebraska and the western Corn Belt at $228. Dressed delivered prices were $356-$358, which was $3-$6 higher in the western Corn Belt and mainly $3 higher in Nebraska.

The five-area direct weighted average FOB live fed steer price last week was 22¢ lower at $227.97. The five-area-direct weighted average dressed delivered fed steer price was $3.50 higher at $357.12.

Choice boxed beef cutout value was $1.24 higher Monday afternoon at $362.87/cwt. Select was $4.67 higher at $350.69.

Grain and soybean futures were higher Monday in what appeared to be a relief rally.

Toward the close, through near Jly  Corn futures were 2¢ to 3¢ higher. KC HRW Wheat futures were 5¢ higher. Soybean futures were 3¢ to 4¢ higher.

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Major U.S. financial indices closed higher Monday, supported by AI stocks.

The Dow Jones Industrial Average was up 227 points. The S&P 500 closed 43 points higher, and the NASDAQ closed 121 points higher.

Through mid-afternoon, West Texas Intermediate Crude Oil futures (CME) were $1.22 to $1.41 higher through the front six contracts.

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Derrell Peel, Extension livestock marketing specialist at Oklahoma State University provides further context to tightening feeder cattle supplies, in his weekly market comments.

Reflecting on the latest Cattle on Feed report, Peel explains, “Feedlot inventories have declined year over year for 13 consecutive months, leading to a 12-month moving average total the lowest since October 2018.” 

As mentioned in yesterday’s Cattle Current, cattle on feed Dec. 1 of 11.7 million head were 255,000 head fewer (-2.1%) than the same month last year.

Moreover, Peel explains the rather slow decline in feedlot inventories masks a sharper drop in feedlot placements and marketings. 

“Feedlot placements in November were down 11.2% year over year and have decreased 8.6% in the last six months,” Peel says. “… As of November, average of feedlot placements the past year are at the lowest level since April 2016.”

Similarly, as of November, feedlot marketing had declined 7.9% during the past six months and average marketing were the least since August of 2106, according to Peel.

Cattle futures closed higher Friday and for the week, helped by holding recent gains in cash fed cattle prices and higher wholesale beef values on the day. The monthly Cattle on Feed report (see below) should help optimism.

Live Cattle futures closed an average of $1.83 higher. Feeder Cattle futures closed an average of $4.39 higher.

Week to week on Friday, Live Cattle futures closed an average $1.03 higher and Feeder Cattle futures closed an average of $4.20 higher.

Negotiated cash fed cattle trade ranged from light on moderate demand in the western Corn Belt to limited on moderate demand in Nebraska through Friday afternoon, according to the Agricultural Marketing Service. For the week, FOB live prices were unevenly steady in both regions at $228/cwt. Dressed delivered prices were $356-$358, which was $3-$6 higher in the western Corn Belt and mainly $3 higher in Nebraska.

Trade was inactive on moderate demand in Kansas. FOB live prices there last week were $230/cwt.

Choice boxed beef cutout value was $4.35 higher Friday afternoon at $361.63/cwt. Select was $2.05 higher at $346.02. Week to week on Friday, Choice was $4.19 higher and Select was $1.80 higher.

Estimated total cattle slaughter last week of 587,000 head was 9,000 head fewer than the previous week and 29,000 head fewer than the same week last year. Estimated year-to-date total cattle slaughter of 28.5 million head was 2.1 million head fewer (-6.9%) than the same time last year. Estimated year-to-date beef production of 24.9 billion pounds was 1.1 billion pounds less (-4.1%) than the same period a year ago.

Grain and soybean futures closed lower Friday.

Corn futures closed fractionally lower. KC HRW Wheat futures closed fractionally lower to 1¢ lower. Soybean futures closed mostly 3¢ lower through May ‘28.

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Major U.S. financial indices closed higher Friday with follow-through support from the tamer than expected Consumer Price Index.

The Dow Jones Industrial Average was up 183 points. The S&P 500 closed 59 points higher, and the NASDAQ closed 301 points higher.

Through mid-afternoon, West Texas Intermediate Crude Oil futures (CME) closed 40¢ to 52¢ higher through the front six contracts.

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Markets will likely view Friday’s monthly Cattle on Feed report as bullish with the fewest November placements since the data series began in 1996.

Feedlots with 1,000 head or more capacity placed 1.6 million head in November, which was 201,000 head fewer (-11.2%) than the same month last year. That was 3.6% less than average analyst expectations ahead of the report.

In terms of weights for net placements, 52% went on feed weighing 699 lbs. or less, 35% weighing 700-899 lbs. and 13% weighing 900 lbs. or more.

Marketings in November of 1.5 million head were 204,000 head fewer (-11.8%) year over year, which was in line with expectations, but the second fewest for the month going back to 1996.

Cattle on feed Dec. 1 of 11.7 million head were 255,000 head fewer (-2.1%) than the same month last year, which was slightly less than expected. Effects of the southern border closure to Mexican feeder cattle imports, due to New World screwworm, grows more glaring with each passing month. Texas feedlot inventory Dec. 1 of 2.6 million head was 9% less year over year and November placements of 285,000 head were 17% less.

Negotiated cash fed cattle trade was moderate on moderate demand in Nebraska and the western Corn Belt through Thursday afternoon, according to the Agricultural Marketing Service.

FOB live prices were unevenly steady in both regions at $228/cwt. Dressed delivered prices in Nebraska were $3 higher at mostly $358. Although too few to trend, there were some dressed delivered trades at $355-$358 in the western Corn Belt, where prices last week were $350-$355.

Last week, FOB live prices were $230/cwt. in Kansas.

Choice boxed beef cutout value was $1.19 higher Thursday afternoon at $357.28/cwt. Select was $2.46 lower at $343.97.

Cattle futures continued lower Thursday with still-overbought conditions.

Toward the close, Live Cattle futures were an average of 75¢ lower (25¢ lower at the back to $1.72 lower in spot Dec).

Feeder Cattle futures were an average of $1.87 lower.

Grain futures were higher again on Thursday, while Soybean futures continued to flounder.

Toward the close, through near Jly, Corn futures were 3¢ to 4¢ higher, supported by strong ethanol production and demand.

KC HRW Wheat futures were 8¢ to 9¢ higher, likely buoyed by short covering.  

Soybean futures were 6¢ to 8¢ lower.

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Major U.S. financial indices closed higher Thursday, supported by a tamer inflation reading than expected.

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2% on a seasonally adjusted basis over the two months from September 2025 to November 2025, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 2.7% before seasonal adjustment. BLS did not collect survey data for October 2025 due to a lapse in appropriations.

The Dow Jones Industrial Average was up 65 points. The S&P 500 closed 63 points higher, and the NASDAQ closed 313 points higher.

Through mid-afternoon, West Texas Intermediate Crude Oil futures (CME) were unchanged to 7¢ higher through the front six contracts.

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Economic uncertainty surrounding U.S. trade policy is much lower than it was a year ago, steadying the broader outlook for 2026, according to a new year-ahead report from CoBank’s Knowledge Exchange.

“With the year-on-year tariff inflationary effect fading by end of the first quarter, core inflation is likely to resume its downward trend in the second half of the year,” say CoBank analysts. “That will provide sufficient cover for the Federal Reserve to continue cutting interest rates in 2026. Moreover, the Congressional Budget Office estimates the accelerated depreciation provisions in the One Big Beautiful Bill Act will boost GDP growth by almost a full percentage point next year.”

Although the labor market has cooled from the post-COVID cycle and is now more in line with historic norms, CoBank analysts explain that wage growth near 4% and unemployment below 5% are well within the margin of safety for a growing economy in 2026.