Price of feed

The price of feed is estimated at 216.1 index points in 2025, representing a 7.7% decline from the previous year. The main factor behind this decrease is a shrinking cattle herd, which has reduced overall demand for feed. As a result, feed inventory has accumulated, exerting downward pressure on prices. The high inventory levels are expected to persist as cattle herd numbers have not been rebuilt, and domestic policy exempts Mexican and Canadian feed from tariffs under USMCA guidelines. This regulatory environment means imports continue to fill market gaps, further regulating price growth.

Feed prices exhibited significant volatility from 2020 to 2025. In 2021, as downstream agricultural sectors reopened following pandemic-related restrictions, demand for feed rebounded sharply, and prices climbed by 15.7%. Rising input costs, particularly soybeans and corn, coupled with inflationary pressures, led to a further price increase of 13.9% in 2022. Supply chain disruptions contributed to these higher costs as producers faced elevated energy and grain prices. In 2023, despite ongoing inflation, feed prices eased by 0.8% as global production recovered and soybean prices declined. This downward trend accelerated in 2024, with prices falling by 7.7% due to reduced feed consumption from a smaller cattle herd, leaving more feed available and pushing inventories higher. Other external events, such as fluctuating oil prices and drought conditions, drove additional volatility within the period; higher oil prices increase the cost of feed through greater demand for corn and soybeans as biofuel inputs, while droughts disrupt crop yields and input supply, adding to the price instability observed in these years.

Trends such as global shifts in protein consumption and policy interventions in international trade also influenced feed prices during the period. Rising living standards in countries such as China, India, and Brazil placed upward pressure on global feed demand in earlier years; however, domestic factors and localized demand-supply dynamics played a more significant role. The exemption of North American feed imports from US tariffs under the USMCA helped mitigate what would have otherwise been greater price spikes during periods of domestic shortage.

The 2020-2025 period is characterized by strong price growth in the immediate post-pandemic recovery years, followed by a reversal as supply normalized and herd sizes contracted. Feed prices increased overall by 2.3% across the period, but sharp annual swings were driven largely by pandemic recovery, inflation, shifts in herd populations, and the ongoing impacts of international and domestic trade policy.