Red-hot cattle futures cooled off a bit last month, offering a glimmer of hope for Texas Roadhouse . Whether beef prices can continue lower is the big question for investors in the beleaguered steakhouse chain. “Cattle is coming down. I think that steak is going to get cheaper,” said Jim Cramer during “Squawk on the Street” this week, as live cattle futures were coming off record highs. For Texas Roadhouse, where beef is the backbone of its menu, any relief would be welcome after feeling the undeniable pressure of an over 20% rise in cattle prices this year. Shares of Texas Roadhouse, which tend to be influenced by beef prices, dropped 6.4% in September — marking their third straight monthly decline. The stock has gained about 5% since settling around $158 a share on Sept. 19, its lowest close of the year outside of the market’s tariff-driven plunge in April. After reporting second-quarter earnings in August, the company raised its commodity inflation guidance to 5% this year, squarely blaming rising beef prices. The prior full-year guidance was 4%. @LC.1 YTD mountain Live cattle futures YTD In early September, live cattle futures hit what was then a fresh all-time high before pulling back some. Last week, they made another run and topped those record levels before declining once again. Unfortunately, cattle industry experts are not convinced that the downturn in futures prices will last. “The drivers of the September correction are that September and October are seasonally weaker-demand [months] as consumer schedules transition away from summer grilling,” Don Close, senior protein analyst at cattle research and forecasting firm Terrain, told CNBC in an interview. “I do not think prices have seen their peak.” “Wholesale purchases will ramp up in late October with purchases of steaks and ribs for the holiday season,” Close said. “Cattle supplies have not yet hit their tightest supply, and heifer [or young female cows yet to give birth] retention still needs to happen. That will further tighten supplies,” which are already at their lowest levels in roughly 70 years, he added. Historically low cattle inventory levels were driven by intensifying droughts, beginning around 2021, covering a large region of U.S herds and limited feed supplies. Cattle ranchers were forced to liquidate cows they could not afford to keep. Additionally, the U.S. Department of Agriculture suspended imports of live cattle from Mexico in May due to the detection of the New World screwworm, a parasite fly. Out of all livestock commodities, the cattle industry also has the longest business cycle. It can take around 18 months to up to 3 years to raise cattle, depending on whether they are corn or grass-fed. “The cattle pricing is going to be like this for the foreseeable future because no one’s putting in significant funds. There’s no beef bailout coming, and there’s no money to inject into this to speed up the process,” according to rancher Jesse Warner, co-owner of Dirty Dog Farm, a direct-to-consumer grass-fed cattle operation in upstate New York. “I don’t see anybody even starting to build back the national herd. There might be individual businesses, but there’s not a concerted effort to build these numbers back up to lower beef prices,” Warner told CNBC. “Even if cattle futures are stabilizing, even if [hypothetically] it’s down 40% today, two years from now is when you’re really going to see the results.” Caught in the eye of this perfect storm are consumers, whose appetite for beef shows no sign of slowing down despite constricted supply and higher prices. Consumers are keeping beef on their plates as they grow more health-conscious and embrace protein-rich diets. For Texas Roadhouse, this dynamic presents a balancing act of providing value steak dinners while protecting margins. “We will take a menu price increase of approximately 1.7% at the beginning of the fourth quarter,” said Texas Roadhouse CEO Gerald Morgan on the company’s post-earnings call in August. “We feel confident this is the right level of pricing to maintain our everyday value, while offsetting some of the inflationary pressures we are facing.” Last month, Evercore analysts joined the overwhelming Street consensus and downgraded Texas Roadhouse from a buy-equivalent to a neutral rating. Nearly two-thirds of analysts covering the stock have a hold rating on it, according to FactSet data, and one-third rate it a buy. Evercore analysts said beef costs “could constrain upside” for Texas Roadhouse shares into fiscal year 2026, despite strong same-store sales and traffic growth . It could take until fiscal 2027 or 2028 to see better conditions, the analysts pointed out, aligning with what Close and Warner told CNBC. TXRH YTD mountain Texas Roadhouse YTD Shares of Texas Roadhouse have lost momentum — now down roughly 19% from their record-high close of $205 and change in late November 2024. The stock almost hit those levels again in May, peaking just under $200 before declining. Shares have lost more than 8% year to date, compared to the S & P 500 ‘s gain of over 14% in 2025. Texas Roadhouse, which also operates casual dining chains Bubba’s 33 and Jaggers, is expected to report third-quarter results at the end of October. If recent earnings from Darden Restaurants , owner of rival LongHorn Steakhouse, are any indication, the numbers may disappoint. While LongHorn’s total sales went up, the combination of higher beef costs and below-inflation menu prices squeezed profit margins. Bottom line The verdict is still out as to whether September’s pullback in cattle futures is a temporary pause in an ongoing climb higher or the first sign of lasting relief in a costly beef cycle. Jim is betting on the latter and is confident that this is the catalyst Texas Roadhouse needs. During September’s Monthly Meeting , Jim said the “stock will go to $200 within weeks of prices breaking in cattle.” Accordingly, we added to our Texas Roadhouse position last month — buying back half of the 80 shares that we sold at higher prices back in May. We had repurchased the other 40 shares back in August. (Jim Cramer’s Charitable Trust is long TXRH. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. 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